According to a report dated 11 November by CNBC, Former U.S. Federal Reserve Chairman Alan Greenspan said that it is pointless for Central Banks to issue digital currencies. He made these comments at a Chinese finance magazine, Caijing’s annual economic outlook conference.
Backed Up by Sovereign Credit
Greenspan elaborated it further, saying that in modern nation-states, currencies are backed up by sovereign credit, a strength no independent institution can provide:
“The fundamental sovereign credit of the United States is far in excess of anything Facebook can imagine.”
Thus, he branded Libra and other such currencies pointless as well.
A Career-Spanning Decades
Greenspan is a renowned American economist and has served the country for two decades, since he was first appointed in August 1987 as Federal Reserve chairman by President Ronald Reagan. Silent in public, positive media feedback rose Greenspan to the level of a ‘star’ despite his being criticized by the leaders of Democratic Congress for politicizing his office. Greenspan supported Social Security privatization and tax cuts.
Later on, it has been said that during his tenure, the easy-money policies of the Federal Reserve led to the dictum bubble. A year after he resigned due to the Subprime Mortgage Crisis, which, it has been said ‘tarnished his reputation’.
Digital Currencies Racing Modern Nation States
Greenspan’s comment comes at a time when digital currencies like Libra are racing modern nation-states like China. The currency, ever since it was first announced has witnessed a lot of downs, from legal issues to high profile withdrawals. On the other hand, China and Tunisia are already in the business of digital currencies, their central banks all ready to issue them.