Former chairman of the U.S. Federal Reserve, Alan Greenspan, does not share the opinion that global central banks should launch a digital currency.
According to a CNBC report today, Greenspan made this known at the Chinese finance magazine Caijing’s annual conference today, stating that “there’s no point for them [central banks] to do it [issue a digital currency].”
The launch of several cryptocurrencies by private firms has forced financial analysts to reiterate central banks should consider launching their digital currency or risk being left behind.
However, Greenspan noted that central banks do not need to bow to such pressure, as he believes that national fiat currencies are backed by all the financial resources of a nation, which he describes as ‘sovereign credit,’ something that no private organization, including Facebook, can offer.
Greenspan said,
“The fundamental sovereign credit of the United States is far in excess of anything Facebook can imagine,”
Since Facebook announced the Libra project in June, the social media giant has met widespread scrutiny from global regulators, especially from the U.S., which reportedly saw the firm loss key partners such as Visa, Mastercard, PayPal, Stripe, eBay, among others in previous months.
Facebook’s intended plan to fully venture into the cryptocurrency industry has made nations to consider the launch of national fiat currencies with countries like China and Tunisia already developing their separate digital currencies.
For the past few months, China has been in the news over the launch of its digital currency- a move that many financial experts believe would lead to an increase in the demand of the Asian giant’s currency, thus surpassing the U.S. dollar in the future, if the U.S. fails to develop a digital currency.
