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Zorro

(15,948 posts)
Fri Sep 6, 2019, 11:20 AM Sep 2019

Why the coming recession could force the Federal Reserve to swap greenbacks for digital dollars

The Federal Reserve has never been more famous than it is today. It drew praise, and ire, for its handling of the financial crisis a decade ago, and the extraordinary measures it took subsequently to stimulate the U.S. economy have made it an important driver of financial markets. Meanwhile, President Trump has made its chairman, Jerome Powell, a household name by frequently criticizing the central bank’s policies in interviews and on Twitter.

And now, a movement has been brewing among economists, financial-services professionals and central bankers to encourage a rethinking of the technology of currency — those paper notes we carry in our wallets — with an eye toward issuing a digital currency. Some argue that could give central banks the tools necessary to break free of chronic disinflation and persistently low or negative interest rates, while giving Americans a risk-free means to transact in a world where digital commerce comprises a growing share of the economy.

“The debate isn’t about whether we need [a digital currency],” Michael Bordo, an economist at Rutgers University and a fellow at the Hoover Institution, a public policy think tank at Stanford University, told MarketWatch. “It’s about how you do it.”

Americans today already use digital currency for most of their purchases. In 2018, they used physical dollars for only 26% of transactions, versus 62% with digital currency, which includes credit cards, debit cards and bank transfers, according to the Fed.

https://www.marketwatch.com/story/why-the-coming-recession-could-force-the-federal-reserve-to-swap-greenbacks-for-digital-dollars-2019-09-06

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Response to Zorro (Original post)

Response to Faux pas (Reply #6)

Faux pas

(14,952 posts)
9. We all need to file
Fri Sep 6, 2019, 12:19 PM
Sep 2019

a class action against the whole bunch for pain, suffering and PTSD. To make things worse, our party seems to be slow walking everything they could be doing to try to stop the madness. At least I live where the pot is legal.

brush

(55,357 posts)
2. Aren't credit/debit card and bank transfers done in dollars though? Does the manipulation and huge..
Fri Sep 6, 2019, 11:25 AM
Sep 2019

swings and losses of Bitcoin and other digital currencies ring a bell?

brush

(55,357 posts)
4. That's my point. There have been huge losses with Bitcoin from manipulators try for quick profits.
Fri Sep 6, 2019, 11:35 AM
Sep 2019

empedocles

(15,751 posts)
5. Just the sheer number of crypto currencies and their lack of regulation
Fri Sep 6, 2019, 11:43 AM
Sep 2019

suggest potential disasters.

Motley Fool listed 1658 such crypto currencies as of March 2018.

unblock

(53,298 posts)
7. if the article means electronic transactions and not blockchain currency, the fed already does this.
Fri Sep 6, 2019, 11:57 AM
Sep 2019

quantitative easing was all done through electronic credits, afaik.

fed officials don't truck billions of dollars of paper currencies around, and banks don't ship tons of dollar bills to the fed every time there's a treasury auction.


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