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.
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.
Additionally, it is unlikely that Bitcoin enthusiasts, for instance, would embrace such an idea when the whole point has been to get away from centralization and all its ills.
Decentral would also be in violation of the principles upon which Bitcoin and other cryptocurrencies were founded. Specifically, Satoshi Nakamoto railed against fractional-reserve banking, which had debased fiat currencies and caused the global financial crisis over a decade ago. Consequently, he (or she or they) created Bitcoin as deflationary money with hardcoded limited supply.
Currently, Moore’s title in Decentral is chief economic officer directly reporting to the group’s CEO Sam Kazemian. Moore is expected to formally take up the position at the beginning of next month.
Most of the executives and investors in Decentral are not new faces in the cryptocurrency and blockchain technology sector. The Decentral CEO, for instance, is also the co-founder and president of Wikipedia competitor Everipedia. The for-profit online encyclopedia has been leveraging the EOS blockchain as a way of ensuring it is resistant to censorship.
Decentral also draws other top executives from Everipedia. This includes Decentral’s chief technology officer Kedar Iyer who is Everipedia’s lead developer. Decentral’s director of software engineering Travis Moore is Everipedia’s chief technology officer.
Together with others, Bitcoin bull Mike Novogratz last year in February invested $30 million in Everipedia.
Last modified: July 2, 2020 8:25 PM UTC