As loathful as the term “central bank” should be true Bitcoin stalwarts, the sector is about to get a mini-Fed of sorts if Trump ally Stephen Moore and his happy band of blockchain developers get their way
According to the Fox Business Network, Moore, who recently withdrew his bid to become a Federal Reserve board member, has teamed up with tech entrepreneurs who are looking to create a central bank for cryptocurrencies.
Central banks and Bitcoin – oil and water?
One of the Stephen Moore-backed central banks goals is to stabilize the Bitcoin price. | Source: TradingView
Dubbed “Decentral,” the goal of the crypto central bank will be to play a role similar to that of traditional central banks. Per the report, this will include stabilizing the prices of Bitcoin and other cryptocurrencies.
Reportedly, this will involve using such methods as “regulating the supply of crypto.” Decentral plans to achieve this by – stop me if you’ve heard this one before – issuing its own token which will be exchangeable for other cryptocurrencies.
Given that traditional central banks can regulate the supply of fiat currency because they have such instruments as interest rates, it will be interesting to see whether Decentral will succeed when it lacks any of that power.
Additionally, central banks wield authority because lenders such as commercial banks fall under their regulatory control. In the decentralized markets for Bitcoin and other cryptocurrencies, this hardly seems feasible – let alone tenable.