In a letter to Federal Reserve Board Chairman Jerome Powell, the US Representatives French Hill and Bill Foster conveyed worries that the significance of the greenback could be at peril because of “wide adoption of digital fiat currencies.”
They stated:
“Internationally, the Bank for International Settlements conducted a study that found that over 40 countries around the world have currently developed or are looking into developing a digital currency.”
Citing the ability of cryptos to confront the features and practicality of paper money, the duo urged the Fed to “take up the project of developing a U.S. dollar digital currency.”
Both Hill and Foster underlined that Federal Reserve has the ability and authorization to ensure a safe, adjustable and stable financial system by creating a national cryptocurrency, if necessary.
It can be remembered that Simon Potter, ex-Federal Reserve official, stated that suggestions to finish the supremacy of the US dollar by substituting it with a cryptocurrency is nonsensical.
He further stated:
“I see no argument that makes sense to have something that complicated out there when you have large, liquid capital markets in the U.S. Not having one currency that you can basically price things and have a deep market in, that makes life much harder for the global economy.”
Potter believes that private enterprises may “coordinate around a virtual currency,” even if central banks do not toe the line. He opined that central banks will be very much worried if private sector moves in that direction.