Hybrid US Dollar Cryptocurrency Launched By Bank

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Just as the US Fed talked down the possibility of a US dollar virtual currency, a bank has launched a streamlined online version of the world’s major currency.

Goldman Sachs, one of the largest banks in America has announced the USD – the cryptocurrency not to be confused with the US dollar.

USD is a hybrid digital and offline currency which the banks wants to exist in both spaces at the same time.

The aim is to bridge the problems that seem to stop cryptocurrencies going mainstream.

USD will reside with the bank and not a peer-to-peer system, consumers cannot mine the currency and the value is pegged to the price of the real-world dollar.

Era of the open internet

The bank is also mulling the idea of other hybrid cryptocurrencies, with the Euro top of the list.

The project is a Goldman Sachs collaboration with fintech start-up Circle.

“The invention of cryptographic assets and blockchain-based computing have ushered in the next major era of the open internet,” said a Circle blog .

“But a price-stable medium of exchange and store of value is missing, and badly needed in order for global financial interoperability to function reliable and consistently.”

Meanwhile, St Louis Federal Reserve Bank President James Bullard debunked cryptocurrencies in a speech.

He argues that they are not equipped to compete with the US dollar and are unlikely to take over as a mainstream currency in the foreseeable future.

Currency competition game

“They’ve got to compete just like everybody else. Welcome to the currency competition game,” Bullard said.

“Cryptocurrencies may be unwittingly pushing in the wrong direction in trying to solve an important social problem, which is how best to facilitate market-based exchange.

“The dollar, on the other hand, is backed by a stable government with direct and sensical monetary policy and persistently low inflation — because of that, it can better achieve the goals and meet the needs of the market.

“The dollar is in great shape and will stay in great shape because it’s been the winner for a long time. Unless we screw up, I think the dollar is going to remain the dominant currency.”

However, even though he talked down cryptocurrency as a means of exchange, Bullard confirmed the blockchain will pay a future role in finance.