by Kevin Schofield
This weekend’s read is a white paper issued recently by the Federal Reserve Bank, pondering whether the Fed should create its own digital currency similar to Bitcoin.
The Federal Reserve plays several critical roles in the country’s financial system. It issues paper and coin currency, backed by the country’s assets. It also serves as a “bank for banks”: Commercial banks keep accounts with the Fed and use them to enable large transfers between each other using the Fed’s central clearinghouse mechanism; the Fed also loans money to those commercial banks. It controls the country’s monetary policies, most notably the interest rates it charges to commercial banks, in order to influence economic growth, employment, and inflation. Finally, the Fed regulates and monitors commercial banks to ensure that the country’s banking system is safe and reliable.Continue reading Weekend Reads: Should the Fed Create Its Own Bitcoin Competitor?