Federal Reserve: We don't need digital currency, but New York has quietly started to do it

New York City lawmakers are proposing a new, highly localized form of digital cash that will run on a peer-to-peer payment platform called "Inclusive Value Ledger."

The proposal comes from New York State Assembly member Ron Kim, Congressman Julia Salazar, and Cornell University law professor Robert Hockett. Hockett published a white paper in November 2019 following the practices of the cryptocurrency circle, detailing the idea.

crypto

The white paper contains common cryptocurrency terms such as "remove the middleman", but this is not really a decentralized cryptocurrency as we know it.

Yes, the form of payment proposed in the white paper is peer-to-peer and requires almost no fees, but it is not a true distributed ledger. This ledger will be managed by the "New York Master Account Administrator" and "Master Account" and "may take the form of public finances for the relevant government unit or a legal trust processed and managed by that unit."

The authors of this white paper call this system "Public Venmo", a way for national citizens to enter the digital economy of the Internet. But unlike Venmo, it doesn't charge for instant bank transfers or credit card systems.

Kim said in a public statement:

"I believe our proposal, Inclusive Value Ledger, can be truly transformative. Create a free public savings and payment platform that all New Yorkers can use, not only to pay for goods and services, but also to transfer money directly to each other. It may fundamentally reshape New York into a fairer, healthier, wealthier and more inclusive place. "

Lawmakers also said the $ 55.7 billion in taxes, remittance deductions and other government benefits issued by the state would be distributed through the digital ledger system.

Salazar says:

"We need to address inequities in the current economy and transition to an inclusive system where everyone can participate."

Hockett added:

"All valuable work and valuable products and services, including currently unpaid nursing work and environmental cleanup, will be compensated immediately; all the money earned can be saved immediately and spent."

The proposal came at the right time. Although the idea of ​​a state-owned digital currency has been ridiculed in the West, especially in the United States, things are starting to change.

Since October last year, China has fallen into a frenzy of learning blockchain for all; Facebook CEO Mark Zuckerberg told the US Congress that the United States needs innovation to maintain its dominant position in the world currency field. China will also launch its own digital currency, while several other private companies have recently launched cryptocurrencies in Asia.

As a result, the European Central Bank and Western countries including Sweden, Wales, Estonia and France have begun to consider establishing their own digital currencies. Although it turns out that the United States is very resistant to this idea, global pressure may only make it change its mind. If so, the bill will be ready and waiting for the right time.