Fed Governor Jerome Powell in favour of private crypto transactions
Fed Governor Jerome Powell in favour of private crypto transactions
Crypto

Fed Governor Jerome Powell in favour of private crypto transactions

By Marco Cavicchioli - 12 Feb 2020

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Fed Governor Jerome Powell said private crypto transactions would be better than the public ones

During a hearing at the Financial Services Committee of the US House of Representatives regarding the state of the US economy and monetary policy, he explicitly said

“A ledger where you know everybody’s payments is not something that would be particularly attractive in the context of the U.S.”.

Powell covered a number of topics, including some on digital currencies, Libra and the Chinese CBDC, and in this context, he answered a question about private transactions. 

From what the Fed Governor said, which could also have something to do with the project being studied to issue a digital dollar, it emerges that the solution adopted by bitcoin for example, which consists of public transactions, even if without the names of the senders and recipients, is not exactly what the Fed would welcome

In many ways, these statements by Powell appear curious, given that private cryptocurrency transactions, such as those of Monero or Zcash, are precisely what traditionally frightens the traditional financial system, which generally considers these transactions completely anonymous as a serious risk in the fight against money laundering or terrorist financing. 

However, it is possible that the governor of the Fed was not actually referring to cryptocurrency transactions, but to those of digital currencies under strict public control, such as the hypothetical digital dollar, the CBDC of China or the Libra itself. 

In fact, in these cases, as for the current fiat currencies, transactions should not be public precisely because they are not anonymous. 

With electronic currencies under strict state control, the objective is always to prevent their anonymous use, effectively requiring any person using them to provide their identity so that the controllers can verify the sender and recipient. 

This is the exact opposite of what happens with cryptocurrencies, where instead it is possible to carry out P2P transactions without being forced to reveal one’s identity, whether as sender or recipient. 

This leads to the financial freedom that makes cryptocurrencies so attractive compared to currencies under strict state control.

In other words, Powell confirms that anonymity is attractive when it comes to monetary transactions, even though this is probably not what he meant. 

Marco Cavicchioli
Marco Cavicchioli

Class 1975, Marco teaches web-technologies and is an online writer specializing in cryptocurrencies. He founded ilBitcoin.news, and his YouTube channel has more than 11 thousand subscribers.

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