Coinbase Legal Chief Says Private Sector Should Build US Digital Dollar

Coinbase's legal chief is calling for private sector leadership in developing America's digital currency.

Brian Brooks, in a Fortune essay published Monday, argued private corporations are best positioned to build a much-debated digital U.S. dollar, and that the government should stand back and let them, doing little to regulate their underlying blockchains.

"The best path forward is one that harnesses our country's remarkable capacity for innovation and also reflects government's historical practice of setting broad guide rails for private innovation within the financial system," Brooks said.

"In short: the private sector should build the technology, and the public sector should set monetary policy."

Further, the project's plans to back the stablecoin with a basket of global currencies could, conceivably, strip America's federal reserve of monetary control.

In October, Federal Reserve governor Lael Brainard said global digital currency projects like Libra could destabilize the world's central banks.

Brooks contrasted Libra's approach with USDC and other similar tokens, asserting instead that dollar-backed digital currencies pose no threat whatsoever to central bank control.

If the Fed-controlled dollar backs the private sector minted stablecoin he pointed out, the fed still controls the stablecoin's underlying monetary policy.

As Brooks sees it, the government's best action would be taking little, if any.

Other than ensuring that varied stablecoin projects - Libra and Coinbase's USDC, among others - hold the fiat reserves they claim to, he called for a hands-off approach to private innovation.