Many people think of Bitcoin as the ultimate contender against the power of central banks, most importantly the Federal Reserve System. But that is certainly not the only way that cryptocurrencies and the blockchain can be used and one particularly interesting idea is that central banks could issue their own cryptocurrencies.
To discuss how this could be done and what the consequences could be we were joined by David Andolfatto, a Vice President of Research at the Federal Reserve Bank of St. Louis and a professor of Economics at Simon Fraser University.
Topics covered included:
– What makes good money? How does Bitcoin fare in comparison?
– What is Fedcoin and how could it work?
– Why the tension between a governments desire for control and the desires for ‘permissionless innovation’ could make this difficult to implement
– Whether Fedcoin would threaten fractional reserve banking
– Why competition between currencies, both governmental and non-governmental, could be a good thing