🔥Federal Reserve VP Describes The Limits Of Cryptocurrency Partnerships

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🔥bitseven.comThe Federal Reserve Bank of Boston is just a ten-minute walk from Boston’s City Hall Plaza, where Forbes is hosting its annual 30 Under 30 Summit.

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To help kick off the two-day event, Federal Reserve vice president of treasury and financial services Jim Cunha joined cryptocurrency leaders from around the industry to talk about the influence blockchain is having on the way people think about money, and how to make it.
Throughout the course of a 20 minute conversation, Cunha detailed some of the early stage blockchain experiments his team of 200 has undertaken using both ethereum and Hyperledger Fabric. Cunha also explained how the branch of the U.S. central bank interacts with other currency issuers and startups to learn more about how blockchain works.
But the biggest obstacle Cunha says central banks face when it comes to embracing the speed and borderlessness of blockchain isn’t technological. Rather, the 30-year veteran of the Federal Reserve says it's uncertainty around the security of the organizations building blockchain that has him most concerned.

“We use private companies all the time,” said Cunha, who has been at the central bank for more than 30 years. “I don’t know if we’ll ever do that with cryptocurrency.”

Many developers in the open-source blockchain ecosystem have opted to remain pseudonymous, and scams involving the technology have proved a successful way to make money on the technology. In the meantime though, Cunha is wasting no time exploring the technology from inside.

He mentioned several other projects including the Monetary Authority of Singapore’s Project Ubin and Clearmatics Technology's Utility Settlement Coin as examples of how central banks are already being influenced by the cryptocurrency world.
In spite of Cunha's cautious take on how third-party cryptocurrency companies might directly partner with central banks, he also listed multiple central bank efforts, including work being done in Sweden, as examples of what he believes could someday result in a state-controlled fiat currency issued on a blockchain.
“I give it five years,” Cunha said.
At first glance, the issuance of a cryptocrrency with some of the price controls implemented by central banks may seem like a lot of unnecessary work to fix a system that works pretty well for many people as is. But another speaker at the event, Circle Internet Financial founder Jeremy Allaire thinks the integration of crypto and fiat could lay the groundwork for new kinds of markets.

Last week Allaire formally launched USD Coin, a cryptocurrency powered by the public ethereum blockchain and backed by U.S. dollar. Allaire argued that by backing the tokens with a more stable currency, he could first enable off-hours trading, and eventually jump start trading between markets around the world that are normally isolated.
Lending support to Cunha’s concerns however, was a panel on how to fix cryptocurrency’s broken reputation. Speakers including Jalak Jobanputra, founder Future Perfect Ventures, Yin Wu, founder Dirt Protocol, and Will Warren, co-founder of 0X, talked about how the run up in price of many cryptocurrencies in 2017, and a proliferation of poorly vetted projects led to a resurgence of skepticism.
But to hedge such concerns, the panelists also reflected on distrust they see in the traditional financial sector, especially by millennials. While Allaire sought to earn that trust by integrating the new technology with some of the old stability, panelists on a second panel focused on other possible solutions.
Speaking on a panel about whether or not crytpocurrency would ever make a viable means of exchange, MIT’s director of digital currency Neha Narula, joined with the co-creator of the Lightning Network for speeding up bitcoin transactions, Tadge Dryja, and Linda Xie, the founder of crypto-token venture capital firm Scalar Capital to argue that new technology, not traditional currency, was the best way to widespread use.

One thing the speakers all had in common though was a focus on re-imagining what monetary systems can look like from the ground-up.

Meltem Demirors, the chief strategy officer of London-based crypto investment research firm CoinShares proposed considering unconventional variables of a monetary system such as fairness, social access and equality of the system when imagining new ways to move money.
“We now have to work together to define the future of who has the right to print money and who has the right to define for us individually and collectively what has value,” Demirors concluded.
I report on how blockchain and cryptocurrencies are being adopted by enterprises and the broader business community. My coverage includes the use of cryptocurrencies such as Bitcoin, Ethereum and Ripple, and extends to non-cryptocurrency applications of blockchain in finance...

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