What is the Fedcoin?

As a central bank cryptocurrency, Fedcoin will be a universal, electronic, 24×7 liability to the Fed’s balance sheet. The use of a blockchain is essential to guarantee the resiliency of the system. Note that blockchain is at its core a data structure and does not have to be a distributed ledger.

Is Cryptocurrency backed by the federal government?

How is cryptocurrency different from U.S. Dollars? There are important differences between cryptocurrency and traditional currency. Cryptocurrency accounts are not backed by a government. Cryptocurrency accounts are not insured by a government like U.S. dollars deposited into a bank account.

What would a digital dollar do to Bitcoin?

Can the digital dollar destroy Bitcoin? The digital dollar will probably not harm Bitcoin and other cryptocurrencies. If anything, it might benefit them. The use of digital currencies might educate people to start to use cryptocurrencies more.

Is the Fed a government entity?

The Federal Reserve, like many other central banks, is an independent government agency but also one that is ultimately accountable to the public and the Congress. The Congress established maximum employment and stable prices as the key macroeconomic objectives for the Federal Reserve in its conduct of monetary policy.

What is fedcoin and how does it work?

But the only way to spend, receive, and store FedCoins will be via an app on your smartphone. And all transactions will be recorded in a centralized government database. That makes FedCoin a sort of anti-cash. Everything you do will leave a permanent record for the feds to monitor and track.

Will the Fed’s central bank digital currency be called fedcoin?

The path to the Federal Reserve’s central bank digital currency (CBDC), or Fedcoin, continues to be played out before the public. This time, Fed vice chair for supervision Randal K. Quarles gave a speech Monday sharing his general ideas. His conclusions are interesting:

How much interest does the Fed pay on fedcoin deposits?

The average rate of interest on a checking account in the U.S. right now is 0.06\%. So, maybe the Fed pays 1.5\% on FedCoin deposits during the transition period. At that rate, FedCoin would pay almost 17 times more than the average savings account in a commercial bank. Many Americans would happily comply for half that amount.

Will the Federal Reserve issue a cryptocurrency?

The Fedcoin has bipartisan support. Jay Powell, appointed as Federal Reserve Chairman by President Trump, said in October that the Federal Reserve is conducting research into issuing a digital currency, on its own and also in partnership with other central banks and the Bank for International Settlements.