What does the US government think about crypto as a payment system? - Crypto in Plain English - Episode 287 - by cryptohunt.it

What does the US government think about crypto as a payment system?

Welcome to the Cryptohunt Jam, where we spend one minute a day to explain crypto. In plain English.

We’ve talked a lot about government’s basic role in our economic system, and how it affects crypto prices. But what does the US government actually think about crypto as a payment system?

Quite a lot it turns out. In September 2022, Presiden Biden signed an executive order asking key government agencies to write reports on various blockchain-related topics. The goal was to recognize that crypto is here, and that the government will have to have an official reaction to it.

A lot of the order was focused on keeping people safe from bad investment decisions and fraud - because let’s be honest with each other, crypto isn’t a safe place yet.

But one particular part of the order instructed the Federal Reserve to publish their thoughts on a Central Bank Digital Currency, which could replace the Dollar as we know it, with something crypto-like.

So, what was in that report? Mostly an assessment of pros and cons to digital money that teach us quite a bit about the worries of Fed officials.

On one hand, they acknowledge that the traditional payments system is somewhat inefficient and unsafe. Read between the lines, and you’ll see they are talking about the high credit card fees we pay to Visa and MasterCard for example, fraud, money laundry, and generally limited payment options that are controlled by closed conglomerates. Something like a blockchain could eliminate many of those.

On the other hand though, it’s all about control. The government has an interest in executing monetary policy, which they could not do if we just switched to Bitcoin and co, which are decentralized. Another issue is privacy, which many blockchains have no good solution for.

So, what’s the takeaway? The US government is clearly seeing the wave of a new financial technology from far away and worries about not reacting quickly enough. But we’ll likely never see a truly decentralized system replace the Dollar. Makes sense to us: The government will still want to at least try to do it’s job to serve and protect us.

This podcast is produced by Cryptohunt.it the easiest place to learn crypto. Copywriting is done by Arndt Voges, Social Media is done by Brett Holleman, Design is done by Carmen Rincon and my name is Christian Byza, Co-Founder of Cryptohunt and I am your host of this daily show.

Disclaimer: This podcast references our opinion and is for information purposes only. It is not intended to be investment advice. Do your own research and seek a duly licensed professional for investment advice.