Fedcoin is a cryptocurrency project that is carried out by the Federal Reserve System of the United States of America which could replace the current US dollar. Countries such as China and Russia are constantly working to eliminate the current hegemony of the USD. The governments of Beijing and Moscow have accelerated the offensive hegemony by seeing how Bitcoin is threatening the current financial system controlled by the USD. It should also be taken into account that the value of the USD has plummeted in the last 100 years. The website usinflationcalculator.com shows how the USD lost 98% of its value under the control of the FED compared to the 1913 dollar and without mentioning the fiat currencies (FIAT) that have totally lost their value.
(Inflation calculator of the United States Dollar from 1913 to 2017, source: usinflationcalculator.com)
The Ghost of Inflation.
The inflationary ghost travels the whole world. This is because governments through their financial agencies have the authority and control to issue inorganic money, which is not backed up by an increase in the reserves of that country or by the increase of productive capacity. The Fed is aware of the threats that are hovering over the USD, which historically has been seen as currencies disappearing. History has taught us that over the centuries, civilizations have had various ways to market their goods, from the exchange of precious stones to the current system of printing paper currency debt, better known as FIAT money.
(Joseph E. Stiglitz, by @JosephEStiglitz, Twitter)
“The United States could and should move to 100% digital and eliminate the paper dollar”.
Winner of the Nobel Prize in Economics.
In other words, the Nobel Prize for economics supports the idea of creating a digital currency without having paper support.
Today cryptocurrencies have become very popular around the world where a Bitcoin is worth more than a troy ounce of gold.
A World Currency.
Due to the scenarios mentioned above, the FED has proposed the creation of the Fedcoin, using the new blockchain technology, and being entirely electronic. The Fedcoin would be in practice, very useful and easy for the banks of the world, it would be a centralized currency which would have its nodes in commercial banks. The Bitcoin has the characteristic to validate its transactions, requiring a validation between the nodes of the network, nodes which are decentralized. In the case of Fedcoin, these nodes will be centralized and controlled by commercial entities and central banks. The idea of this currency is that the USD does not continue to lose value over time.
The financial benefits of Fedcoin for governments would be huge:
- For the first time, a world currency would be used, backed by governments, being in practice a popular currency without borders.
- Governments can have the exact information of how much money a person has, how they spend and how much earn. This would avoid tax evasion.
- Greater control to know exactly how much currency is issued through its blockchain.
- Avoid printing false bills.
- Even know the Fedcoin that are not being used to regain the power of them or place negative interest rates to reduce the amount of Fedcoin circulation.
Likewise, in order to achieve the dominance of Fedcoin, first people must lose confidence in FIAT and current cryptocurrencies, which is a very difficult task to achieve since those who believe in projects like Bitcoin are based on decentralized projects, where they do not want third parties or governments to manage their finances.
There is no doubt that the financial system of the planet is changing. Paper money is being replaced by digital money based on blockchain technology, where the gold standard will be transferred by the silicon pattern or digital pattern.