As demand for cryptocurrency like bitcoin skyrockets, the Federal Reserve announced the idea of a digital dollar, which would be an electronic fund under control of the government and presented as a sort of competitor to other cryptocurrency. But a central online dollar would work nothing like bitcoin, and it could accelerate interest with other cryptocurrency due to inflation and privacy concerns. Such a system could mirror similar efforts in China, where convenience gets traded for civil liberties. Treasury Secretary Janet Yellen has warned the public against the use of cryptocurrency, calling it dangerous and suggesting it needs regulation. But it is unlikely that a central online dollar, backed by fiat money, would satiate the demand for digital assets. Most people will move to purchase cryptocurrency to hedge against inflation as the dollar declines in value, due in part to more dollar printing by the government. Consider that $10 in 1980 had about the same buying power as $30 … [Read more...] about Why a digital dollar could be an economic and privacy calamity
