The Fed Should 'Get Serious' About Crypto, Says Former FDIC Chair

The former head of the U.S. government deposit insurance corporation wrote in an opinion article last week that the Federal Reserve should seriously consider its own cryptocurrency.

Sheila Bair the former chai of the US Federal Deposit Insurance Corporation, emphasized the pressing need for the Federal Reserve Bank to consider the prospects of a central bank-issued digital current (CBDC).

She warned:

A CBDC, in theory, would not have the same kind of culpability to large fluctuations in value given proper oversight and management by a centralized authority, she said. Beyond this, Bair points out that centralized digital currencies would be "much more effective tools for conducting monetary policy to address economic cycles.”

Currently the government is allowed to stimulate or slow the economic activities during and recessions or booms respectively.

So Bair believes that a “Fedcoin” will help the banking sector. The changes in interest rates that either encourages savings or spending will be felt directly by the consumers.