Fed considering digital currency: official
The Federal Reserve is considering adopting its own digital currency similar to bitcoin, according to the president and CEO of the Fed’s New York branch.
William Dudley said during a conference on Wednesday that the Fed is exploring digital currency options, but warned that any implementation would be far off in the future, according to Dow Jones.
It would be “very premature” to speculate when the Fed could make such a decision, Dudley said, adding that he views bitcoin and other similar digital currencies as “more of a speculative activity” than a stable object of value.
Other Fed officials are less sure. CNBC reported that in September, Philadelphia’s Federal Reserve President Patrick Harker cast doubt on the idea that the U.S. government would ever throw support behind a digital currency.
“The paper that’s in your pocket, that we call money, only has value because we believe it has value, because we believe the government stands behind it. It’s all trust issues,” he said at the time.
The value of bitcoin and other digital currencies hit an all-time high this month, with individual bitcoins themselves surging past $11,000 in trading value just a day after passing $10,000.
In early November, the aggregate value for all crypto- and digital currencies topped $200 billion for the first time ever.
So far, the Securities and Exchange Commission has done little to regulate bitcoin and other digital currencies. In 2014, the SEC warned investors about “potential risks of investments involving Bitcoin” and other cryptocurrencies in a letter.
“A new product, technology, or innovation – such as Bitcoin – has the potential to give rise both to frauds and high-risk investment opportunities. Potential investors can be easily enticed with the promise of high returns in a new investment space and also may be less skeptical when assessing something novel, new and cutting-edge,” the SEC warned in 2014.