Federal Reserve Bank of Boston Partners with MIT to Research How Crypto Can Co-exist with the Dollar
The Federal Reserve Bank of Boston has partnered with the Massachusetts Institute of Technology (MIT) to research the feasibility of cryptocurrencies co-existing with fiat currencies. As reported by the Boston Herald, the partnership will stir the two institutions to study the blockchain technology that enables cryptocurrencies to be traded.
Jim Cunha, Senior Vice President at the Federal Reserve Bank of Boston says that the research the bank is pioneering will help the nation to stay ahead of the curve with its futuristic approach. The initiative as he noted will help to study and understand the cutting-edge technology that makes cryptocurrencies such as Bitcoin and Ethereum to be so successful. Understanding this will help the Fed determine if government-backed currency can be dollars, cents and Bitcoin.
Cunha said, “We’re really trying to understand what the technology can offer and if it’s a path we’d like to go down, I liken it to the early days of the internet,”—An era filled with dissenting views as to the sustainability of the new technology.
Advocating for the Co-Existence of Cryptocurrency and Fiat
The Fed executive backed by Assistant Vice President Robert Bench believes there is a need to reassess the relevance of the dollar owing to its potential devaluation due to COVID-19.
The research proposition by the Boston Fed is further bolstered by the fact that Bitcoin (BTC) has never been hacked allaying fears of insecurity in the digital currency world. The underlying aim is to see if there can be a future where regulators will see cryptocurrencies and fiat as complementary and not necessarily as a threat to one another.
The Federal Reserve Bank has been proactive in the creation of a digital currency. Federal Reserve Board Governor Lael Brainaird has confirmed that the United States Federal Reserve is currently experimenting with blockchain and DLT in pursuit of its central bank digital currency (CBDC) or digital dollar. The Boston Fed research will serve as a complement to this bigger project.
With most United States agencies bullish on digital currencies, the North American country may be closer to achieving its ‘futuristic goal’ with respect to the integration of cryptocurrencies as noted by Jim Cunha.
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