The President of the Dallas Federal Reserve, Robert Kaplan, stated that he believes the US Central Bank will eventually issue its own digital currency, believing that this is the last mile when it comes to the digitization of the payment system.
According to Kaplan, it is something that the central bank is actively working on, going on to state,
“I would imagine in the years ahead — it’s something the Fed is actively working on now — and I can see reasons why that will eventually get developed; China is already doing their own experiment with it. The Fed is a “long way” from making a decision and is currently studying the issues, including the potential impact on banks.”
The Other Side Of The Spectrum
While Robert Kaplan has a positive view of the central bank and the cryptocurrency market, Minneapolis Federal Reserve President Neel Kashkari has a different view of the crypto market. Kashkari stated that he did not believe that the world’s largest and most popular cryptocurrency had any real use cases, referring to the digital asset sector as prone to hype and fraud.
Speaking at the Pacific Northwest Economic Regional Annual Summit, Kashkari stated, “Cryptocurrency is 95% fraud, hype, noise, and confusion.”
While cryptocurrencies have gained significant traction during the current year, it is still viewed as an asset that is highly speculative and risky, compared to traditional markets.
Views On Monetary Policy Plans
Kashkari also offered his views on monetary policy plans, observing that he still sees a significant slack in the labor markets. He suggested that he may need to see more strong job reports before he supports scaling back of the monthly purchase of $120 Billion in Treasury and Mortgage-backed securities.
The comments by the President of the Minneapolis Federal reserve gain precedence as they come during a growing conversation about the timing of the pulling back of the Def’s Covid-era accommodations as the economy tries to recover from the effects of the pandemic. Kashkari believes that it would be reasonable to reduce bond-buying by the end of the year if the job market is favorable.
The US created 943,000 jobs in July, indicating that economic recovery was gaining momentum despite significant concerns over the Delta variant of the Covid virus.