Saturday, January 16, 2021

Implications of Federal Reserve backed stablecoin

Thinking about recent announcements this morning, and I realised I have not seen any discussion about MKR's viability in the event that the US Federal Reserve decides to create a digital currency freely convertable to USD, as has been hinted at in the past. This might allow individuals to have "bank accounts" with the Federal Reserve with minimal administration, especially if they integrate the currency with the banking system.

https://finance.yahoo.com/news/bitcoin-race-adoption-central-banks-220434186.html

https://www.livemint.com/news/world/biden-administration-could-unsettle-banks-in-more-than-one-way-11609834107056.html

Has much thought been given to whether DAI would be viable if this comes to be (especially if the currency was ethereum based)? My thought is that it would be viable as a marginal player because the DAI savings rate would create demand, but a central bank backed freely exchangeable currency would become the defacto standard.


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