Who Gets Left Holding the Digital-Dollar Fad?
The Fed isn’t obliged to join China and other central banks in the craze to issue an official electronic currency. Private equivalents may do the job better.
Michael Jackson, master of the fad with a lesson for the Fed.
Photographer: Jim Steinfeldt/Michael Ochs Archives/Getty
Is the idea of a digital dollar just a fad — like the 1980s craze with parachute pants that became synonymous with Michael Jackson and M.C. Hammer?
Randal Quarles, the Federal Reserve’s vice chair for supervision, recently used that very imagery to express his skepticism. He wasn’t trying to prejudge the monetary authority’s thinking, which will soon be outlined in an eagerly awaited discussion paper on a so-called FedCoin. But speaking for himself, Quarles isn’t convinced that the Fed should have to issue its own electronic money to the public even if other central banks do so. My interpretation of what he’s suggesting is this: Instead of one, there could be many digital dollars. All private.