Could the Federal Reserve Issue Their Own Cryptocurrency?

[ebliever]

This is like the Postal Service announcing they are creating their own "electronic messaging system" like email. Why? What would be the point? It wouldn't save them, and there's no reason to think they'd do it better than is already being done by others. The shortcomings of bitcoin (security and ease of use) are not solvable by the Fed or any roomful of Nobel Laureates, so them creating an altcoin would be pointless. Any innovation they could come up with could just be replicated by every other crypto in existence. The only edge they could possibly get would be regulatory/legal in nature, and it would be blatantly obvious to everyone if such favoritism were put into words. That would simply wake up Wall Street and Mainstream America to the nepotism and how it would be inferior to existing cryptos in the ways that matter, which would end up providing a big boost to real cryptocurrency, even if it had to happen "underground."

[log2exp]

Doubt the security of the fed's blockchain.

Firstly, there is no limit on number of coins, no incentive to hold the value over time.

Secondly, no incentive for miners to maintain such network.

Thirdly, if code is not open source, nobody will use this coin. If it is open source, consensus could put an upper limit to the coins, which defeats purpose of the FDR.

[Agestorzrxx]

If Federal Reserve issue their own cryptocurrency, it will definitely not like bitcoin, or based on bitcoin protocol .bitcoin protocol is decentralized as no one can control it.
Federal Reserve will know allow this happened.
It should use ripple protocol.

[Blinken]

Well, they are already issuing computer-generated "cryptic" currency, so it would not be too much of a stretch.

[Danydee]

 I don't think in this way,  They will surely made this as a centralized system and use cryptologic and blockchain technologies for make the system more self-secured and  autonomous

so,,
(just in case), we should stay tuned and to prepare for the emergence of this crypto for do not to be late in case they would consider to veil certain excesses

[QuestionAuthority]

ROFL - FAIL

[Professor Plums]

This is like the Postal Service announcing they are creating their own "electronic messaging system" like email. Why? What would be the point? It wouldn't save them, and there's no reason to think they'd do it better than is already being done by others. The shortcomings of bitcoin (security and ease of use) are not solvable by the Fed or any roomful of Nobel Laureates, so them creating an altcoin would be pointless. Any innovation they could come up with could just be replicated by every other crypto in existence. The only edge they could possibly get would be regulatory/legal in nature, and it would be blatantly obvious to everyone if such favoritism were put into words. That would simply wake up Wall Street and Mainstream America to the nepotism and how it would be inferior to existing cryptos in the ways that matter, which would end up providing a big boost to real cryptocurrency, even if it had to happen "underground."

Nice analogy and I agree with you. It's just not really feasible for them to create their own cryptos either as to have the sort of centralized processing power would be very costly to them whereas bitcoin's processing power is decentralized and all over the globe.

[Daniel91]

This may be good idea for them but I don't think they will ever consider this solution.
Paper money they can easily control but Cryptocurrency is another issue (they may consider something completely different from bitcoin).
It's also question of supply and demand and if local businesses will accept it.
To complicate issue.

[countryfree]

No, it can't. No way.
It would be totally illegal.

The Federal Reserve, nor any central bank, doesn't have the power to create a new currency. It's duty is to protect, or control, or develop (depending on circumstances) the currency which is legal tender in the country. It cannot create a new currency, and it cannot change the currency it's working with.

It's not really a replacement for the dollar or even a new currency but rather a digital representation of the dollar that is able to leverage the power of the blockchain to allow or trustless, near-instant, and low-cost transactions. The Fed will keep the coin's value stable by readily accepting USD for fedcoins and vice versa.

Replacement or new currency, that doesn't change a thing. The Federal Reserve doesn't have any right or power to do anything with anything else besides the US dollar. the dollar is its one and only mission.

[Snail2]

Replacement or new currency, that doesn't change a thing. The Federal Reserve doesn't have any right or power to do anything with anything else besides the US dollar. the dollar is its one and only mission.

Yes, but they can change the medium for those dollars, just like they can change the paper and the printing technology over the time.

[Q7]

Well any individual can create crypto so why not they? Question is whether they want to in the first place. Probably it won't be something decentralized like what bitcoin is so it will be centralized and that there's always a form of control. Again in the end i don't think that they will ever need to do this.

[fiN.]

Well any individual can create crypto so why not they? Question is whether they want to in the first place. Probably it won't be something decentralized like what bitcoin is so it will be centralized and that there's always a form of control. Again in the end i don't think that they will ever need to do this.

Anyone can create a coin but they can't force people to use it. Just look at all the shit alts that come and go. Without people behind them they're worthless and will die a quick death.

http://merchant.mintchipchallenge.com/assets/images/mintchip_dev_promotion.jpg

ROFL - FAIL

Haha. Did they really copyrite it?

[keyscore44]

Yes they could but there isn't any need when we've already got Bitcoin.

No need for more shitcoins...especially centralised ones issued by the Fed.

[QuestionAuthority]

Well any individual can create crypto so why not they? Question is whether they want to in the first place. Probably it won't be something decentralized like what bitcoin is so it will be centralized and that there's always a form of control. Again in the end i don't think that they will ever need to do this.

Anyone can create a coin but they can't force people to use it. Just look at all the shit alts that come and go. Without people behind them they're worthless and will die a quick death.

ROFL - FAIL

Haha. Did they really copyrite it?

Of course, they needed to make sure they had absolute control of the loser. lol

Government Bitcoin copycats will never be successful because they can't offer the things that draw people to Bitcoin. Even Bitcoin won't survive if it strays away from them. Money that's controlled by no one, auditable by everyone and secured by the world cannot be copied by a government. Money controlled by the govt, closed source and secured by the govt is called fiat. We already have that.

[tss]

haha.  that would be a great pump and dump.  interesting way for the fed to get some BTC

[Denker]

This is like the Postal Service announcing they are creating their own "electronic messaging system" like email. Why? What would be the point? It wouldn't save them, and there's no reason to think they'd do it better than is already being done by others. The shortcomings of bitcoin (security and ease of use) are not solvable by the Fed or any roomful of Nobel Laureates, so them creating an altcoin would be pointless. Any innovation they could come up with could just be replicated by every other crypto in existence. The only edge they could possibly get would be regulatory/legal in nature, and it would be blatantly obvious to everyone if such favoritism were put into words. That would simply wake up Wall Street and Mainstream America to the nepotism and how it would be inferior to existing cryptos in the ways that matter, which would end up providing a big boost to real cryptocurrency, even if it had to happen "underground."

Best answer someone could give to that question!

[mistercoin]

Canada's mint is already working on it Don't know if anythign will come of it though. Nevermind.
http://en.wikipedia.org/wiki/MintChip

[aws]

This is like the Postal Service announcing they are creating their own "electronic messaging system" like email. Why? What would be the point? It wouldn't save them, and there's no reason to think they'd do it better than is already being done by others. The shortcomings of bitcoin (security and ease of use) are not solvable by the Fed or any roomful of Nobel Laureates, so them creating an altcoin would be pointless. Any innovation they could come up with could just be replicated by every other crypto in existence. The only edge they could possibly get would be regulatory/legal in nature, and it would be blatantly obvious to everyone if such favoritism were put into words. That would simply wake up Wall Street and Mainstream America to the nepotism and how it would be inferior to existing cryptos in the ways that matter, which would end up providing a big boost to real cryptocurrency, even if it had to happen "underground."

This would not be about innovation, but about putting dollars on a blockchain. This way one can send dollars anywhere in the world as fast as bitcoins.
Also this would allow people from other countries to hold dollars, if they wanted to - and a lot of them do want to, without the permission of their local governments.
Don't think about it as an altcoin, but as a US dollar on a blockchain.

[ebliever]

This is like the Postal Service announcing they are creating their own "electronic messaging system" like email. Why? What would be the point? It wouldn't save them, and there's no reason to think they'd do it better than is already being done by others. The shortcomings of bitcoin (security and ease of use) are not solvable by the Fed or any roomful of Nobel Laureates, so them creating an altcoin would be pointless. Any innovation they could come up with could just be replicated by every other crypto in existence. The only edge they could possibly get would be regulatory/legal in nature, and it would be blatantly obvious to everyone if such favoritism were put into words. That would simply wake up Wall Street and Mainstream America to the nepotism and how it would be inferior to existing cryptos in the ways that matter, which would end up providing a big boost to real cryptocurrency, even if it had to happen "underground."

This would not be about innovation, but about putting dollars on a blockchain. This way one can send dollars anywhere in the world as fast as bitcoins.
Also this would allow people from other countries to hold dollars, if they wanted to - and a lot of them do want to, without the permission of their local governments.
Don't think about it as an altcoin, but as a US dollar on a blockchain.

They could create a blockchain (let's call them bitdollars) and pass laws guaranteeing a fixed conversion rate between bitdollar and the dollar. This would  give them faster transaction times, but with some risks and problems. Since the bitdollar would have a level of supply independent of the supply of dollars, they could have difficulties supplying enough of the bitdollars to meet demand for the service. On the flip side, flood the market with too many bitdollars and you effectively inflate the dollar, causing inflation to get even worse. It would add an additional variable to their attempts to control the money supply of the dollar.

There would also be the issue of securing the network. We talk about how bitcoin challenges traditional fiat institutions, but no one is targeting bitcoin for destruction the way that countries like North Korea or the Taliban or ISIS would love to target an American dollar-backed blockchain. So right from the start the bitdollar would need a sizable investment in mining hardware (underwritten by our tax dollars?). And if America aggravates China or Russia or some other powerful state badly enough, the risks go thru the roof. I doubt the U.S. has the financial resources to defend a bitdollar against the Chinese in a few more years, if they decided to take the U.S. on. And if they relied on public mining, well you can imagine the shenanigans that even smaller entities could pull off using leased mining farms to attack the blockchain.

[lyth0s]

No, it can't. No way.
It would be totally illegal.

The Federal Reserve, nor any central bank, doesn't have the power to create a new currency. It's duty is to protect, or control, or develop (depending on circumstances) the currency which is legal tender in the country. It cannot create a new currency, and it cannot change the currency it's working with.

They could if they just said that they were "reformatting" the way that the USD is transacted within the banking system and that they are moving to a USDCoin that essentially just takes over the place of the physical USD and digital USD in bank account. They could also create an addendum to the current laws and they would sell the addendum as "we need to adapt the law to the current advances in cryptocurrencies that are among us".

The real question becomes this: IF the fed did create their own coin, would you trade all of your bitcoins in for them? I don't think so...

Also they could create "fake" hard caps to the currency and then they would need to hardfork it every few years to increase the cap, much like they need to vote on "increasing the debt ceiling" every few years...