In what could be an interesting turn of events, there has been chatter that the Federal Reserve could be looking into getting their own digital currency.
2017 has most certainly been the year of the digital currency, with bitcoin having soared past the $10,000 milestone yesterday, having been less than $1,000 at the start of the year. Other digital currencies such as Ethereum have seen great results and every day there are new tokens and ICOs coming out.
William Dudley is the CEO and president of the Federal Reserve Bank of New York and it is during a press conference today that he discussed how people within the Fed were discussing the potential use of having their own digital currency.
Of course, this would not be something that would be developed in the near future and it would be premature to suggest that the Fed would definitely be pursuing this avenue, but it certainly was the catalyst for some light-hearted debate about the merits of the idea.
These comments came despite Dudley saying that his personal view of bitcoin is that it’s more of a speculative activity and does not act as a sort of value like gold does.
Even as he was speaking these words, bitcoin hit new highs and nearly touched the $11,000 mark, having only hit $10,000 the previous day.
There is no doubting the current popularity of bitcoin and now that mainstream media are covering these stories on an almost daily basis, more and more people are hearing about it. The general public is becoming more informed and as a result of the massive profits that are being earned by those invested in the digital currency, they are themselves looking to get investing.
Despite these surges in popularity, many key figures in the world of finance believe that bitcoin is a bubble, such as Warren Buffet and the CEO of JPMorgan Jamie Dimon even went so far as to call it a scam.
While there are a lot of skeptics out there, there is no doubting the fact that the underlying blockchain technology is set to have a massive effect on the way the world works in the future. There are so many applications for this technology that entire industries are going to be transformed.
It was at the beginning of this year that the President of the Minneapolis Fed Neel Kashkari talked about how he was a sceptic when it came to bitcoin ever becoming a mainstream currency, but he was confident that blockchain technology had a lot of potential for further development across a variety of fields.
The blockchain is the mechanism by which digital transactions are recorded, which is an integral part of the process of trading bitcoin. It allows for safe transactions and quicker processing times and fewer fees, all of which are an advantage to the user.
While bitcoin has not really hit widespread adoption in terms of a payment system or currency, 2018 looks set to be the year that it smashes down a lot of the previously held systems that are in place in the financial world. Soon people will be paying for goods and services everywhere they go with cryptocurrencies if they wish to do so.
