A former United States’ commodities regulator has come out to state that the government ought to digitize the dollar and also remove power from central banks.
On Oct. 15, the Commodity Futures Trading Commission (CFTC) former chair Christopher Giancarlo claimed the dollar had a high chance of losing its prominence in the future — in one of the opinion piece published in the Wall Street Journal.
According to him, other countries have as well started to roll out digital currencies which necessitate for creation of a new dollar form.
He subsequently proposed a digital dollar — running on a government-sanctioned blockchain protocol that an independent nongovernmental group would create and maintain. However, banks and other trusted payment organizations will supposedly administer the protocol.
“Cash brought into the system would be exchanged for digital US dollars on a blockchain, with the cash lodged in special escrow accounts maintained by the Federal Reserve,” Giancarlo continued to explain.
Decentralization of the financial system
The digital dollar concept diverges away from the digital currency discussions that many banking sources have had as it hints directly at money power decentralization.
Besides advocating for central banks loss of control over national currencies, Giancarlo said that the US risks weakening the dollar’s appeal if digital currency is shunned.
He specifically gave the following warning:
“Significant actors, including central banks and social media platforms, may launch new currencies in the next few years. As their networks grow, they could eventually erode the dollar’s status as the most popular currency for international exchange.”
Additionally, He even went on to compare the potential decline of the dollar to the loss of power of the pound sterling after World War II was finished.
Saifedean Ammous — one of the Bitcoin (BTC) proponents who chime this theory — noted that at regular intervals, global reserve currencies seem to come and go — in his book “The Bitcoin Standard”.
The reason, however, that Ammous gave for this scenario is the government’s poor handling of currency — which involved blatant meddling in its value and issuance.
He went ahead to claim that the gold standard upon which modern fiat currencies (including the dollar) are based upon, would soon be left.
According to Giancarlo’s previous statement, 2019 is expected to become the beginning point for regulators to display a concerted international response regarding cryptocurrencies.