Former US FDIC Chair: The Fed Should Consider Issuing a CBD & Hemp
The former chair of the US FDIC (Federal Deposit Insurance Corporation) stressed that the Federal should seriously consider its own cryptocurrency now, in an op-ed last week.
Sheila Bair, the former head of the U.S. Federal Deposit Insurance Corporation (FDIC) emphasized the need for the Federal to consider the prospects of a CBDC (Central Bank Digital Currency), in a piece published by Yahoo Finance. Bair warned:
“If it does not stay ahead of this technology, not only could banking be disrupted — but the Fed itself could also be at risk.”
According to her, a CBD would not have the same culpability to large fluctuations in its value if it’s properly managed by a centralized authority. Moreover, CBDCs can prove to be more effective in conducting monetary policies to address economic cycles.
The current status quo allows the government to stimulate cbd oils the economy when a recession hits and slow it down in periods of boom, all through the state-sponsored securities sales directed towards banks in the country.
But what if a CBDC issued and backed by the Federal Bank, was held by hemp oils each and every consumer in the US? In that case, changes made to interest rates encouraging consumers to save, and spend, in other times, would be felt directly by them, unlike the present scenario where this happens through policy changes made by domestic banks.
However, Bair thinks that there is also a potential downside to this perceived benefit – credit availability. Credit deficits could be caused by consumers wanting to hold all their wealth in the “FedCoin” if certain parameters are not put in place to ensure that other banks and financial institutions remain competitive against the central bank issued currency.
Bair’s comments on CBDCs being the need of the hour are timely as government officials across the globe weigh the merits and demerits of issuing a CBDC.
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