Volcker Might Have Said Yes to a Digital Dollar

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What would the late former Federal Reserve Chair Paul Volcker have thought about digital currencies issued by central banks?

According to Sylla, Volcker casually remarked that the world might be better off if it had a single currency; things might just be simpler that way.

Volcker said in December 2009 that he thought the ATM machine was the most important innovation in the banking industry of the prior two decades, because it "Really helps people and prevents visits to the bank and it is a real convenience."

Dick Bove, a five-decade financial-industry analyst for the brokerage firm Odeon Capital, said in a phone interview that Volcker likely would have opposed bitcoin and other digital assets built by independent developers.

According to Bove, Volcker believed "Central banks should have control of the financial system in a given nation, and it should have control of interest rates and the volume of currency being created, and it should be used to help the country meet whatever goals are needed at any point in time."

A digital currency issued by the central bank? Bove bets Volcker would have been all for it - just for the sake of keeping up with new technology.

"If the need for a central bank digital currency arose, I think Volcker would have created it," Bove said.

Paul Brodsky, a partner at the crypto-focused investment firm Pantera Capital, argues that Volcker likewise might have taken a cautious approach to a digital dollar rollout.

Keeping a tight lid on money....Jimmy Song, with crypto-focused venture capital firm Blockchain Capital, says Volcker might have endorsed a digital dollar as a technology.

According to Sylla, the financial historian, Volcker would not have wanted to cede monetary authority to private companies like Facebook, which is developing a digital asset for payments, known as Libra.

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