Stephen Moore, who backed out from a nomination to the Federal Reserve Board of Governors, is now trying to upend central banks.
On Monday, the economist announced his involvement with Frax, a stablecoin backed by a fractional reserve.
Coming via a partnership with Sam Kazemian, CEO of Wikipedia rival Everpedia, the stablecoin would be pegged to the value of the dollar but not necessarily backed one-for-one with greenbacks.
How? Kazemian explained in an interview with Crowdfund Insider last month that Frax will be managed in a system similar to what traditional economists understand as fractional-reserve banking.
Tying this back to Frax, Kazemian said the stablecoin will be an "Algorithmic, fractional-reserve stablecoin." This suggests part of the value backing Frax will be deployed in profit-earning endeavors to ultimately increase the wealth of the system.
"This is similar to how a central bank buys back currency with bonds by issuing debt."
Backing a stablecoin with a fractional reserve has been done before, including with Saga, a non-anonymous stablecoin tied to International Monetary fund assets and governed by a board of economic notables.
"The days of government monopoly of currencies by central bankers is coming to a screeching halt."
Though the central bank has been engaging in an internal debate over the merits of issuing a digital dollar, many high-level officials have publicly met competing cryptocurrencies with open disdain.
"If a large share of domestic households and businesses come to rely on a global stablecoin not only as a means of payment but also as a store of value, this could shrink demand for physical cash and affect the size of the central bank's balance sheet."
Former Fed Nominee Stephen Moore Backs Fractional Reserve Stablecoin
에 게시 됨 Oct 21, 2019
by Coindesk | 에 게시 됨 Coinage
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