Former Federal Reserve Chairman: Libra and the central bank's digital currency are meaningless

Former Federal Reserve Chairman Alan Greenspan said the central bank’s issuance of its own digital currency is “meaningless”.

According to CNBC’s report on November 12, Greenspan made the remarks at the annual economic outlook conference hosted by Caijing.

Former Federal Reserve Board Chairman Alan Greenspan

Why does Greenspan think so? He believes that the national legal currency is supported by sovereign credit – this applies only to the state and its institutional structure.

Even the tech giants in the era of FAANG's rise cannot compete with the US financial market in depth and breadth. FAANG is the acronym for Facebook, Amazon, Apple, Netflix and Google, the world's five most successful technology stocks.

Greenspan said:

"The core sovereign credit of the United States goes far beyond Facebook's imagination."

The social networking company announced a cryptocurrency project called Libra earlier this year that caused a stir. The project has established partnerships with major payment companies around the world. However, last month Visa, MasterCard, PayPal, Stripe and eBay said they would withdraw from the Libra Association as the US government stepped up its review.

Greenspan is the chairman of the Fed appointed by Reagan, experienced the 1987 "Black Monday" stock market crash, the technology boom of the 1990s, the financial crisis in Mexico, Asia and Russia (1994, 1997 and 1998 respectively) and 2000 The Internet bubble bursts.

After the historic financial crisis of 2008, Greenspan's reputation plummeted, and his colleagues and his colleagues were accused of formulating policies that led to the collapse of the global financial system.

In an era of growing Sino-US relations, it is widely expected that the People's Bank of China will become the first major global economy to introduce digital currency.

In October, members of the US House Financial Services Committee sent a letter to the current Federal Reserve Chairman Jerome Powell, asking about the prospects for issuing CBDC dollars.

Lawmakers believe that the Fed has the ability and obligation to develop a safer, more flexible, and more stable monetary and financial system by developing digital dollars.

Patrick Harker, president of the Federal Reserve Bank of Philadelphia, said in early October that the issuance of digital currencies by central banks, including the Federal Reserve, would be "inevitable." He said his views are "belonging to the minority" in the Fed, but his staff is studying the issue.

However, Harker believes that the United States should not be the first to eat crabs in the issuance of central bank digital currency.

“Frankly, I don’t think we should be the first country to do this, but I think we’d better prepare.”