The Blockchain Economic Forum kicked off in Davos, Switzerland, with a keynote speech on Digital currencies delivered by J. Christopher Giancarlo, ex-chair of the Commodity Futures Trading Commission (CFTC).
In his speech, Giancarlo spoke in depth about his recently launched digital dollar project that was meant to develop a virtual currency that’s fully backed by the United States government.
He explained that he launched the project because the circulation of U.S. central bank money has remained “strictly local,” and its functionalities are “limited.”
Giancarlo added that he believes that despite being in the 21st century, the modern-day financial system is still based on the norms of the 20th century, one that does not allocate space to technological innovations.
“We seek to encourage the next major innovation in the U.S. currency: a tokenized fiat currency issued by the Federal Reserve System,” said Giancarlo.
He added that he envisions a “new digital form of the Dollar” that, together with native fiat currency and reserves, would enjoy the complete acceptance and credit of the U.S. government as central bank currency.
Additionally, the ex-chairman of Commodity Futures Trading Commission remarked that, had blockchain technology been introduced to the world before the global financial crisis of 2008, it could have fully mitigated the crash.
Giancarlo Pushes for the Digitization Of The Dollar
While expanding on the digital dollar initiative, the former CFTC chair told the audience at Davos that the primary objective right now is to marshal resources in the private sector in order to carry forward constructive thinking and conceptualization of digital currency.
According to Giancarlo, the digital dollar will not be a derivative of the fiat dollar, and it will be backed by the full credibility of the U.S government, just like a legal tender.
Additionally, Giancarlo mentioned efforts from the private sector, including Facebook-supported Libra stablecoin project, and digital coins from Goldman Sachs, JPMorgan, and Walmart, among others, hailing the developments as important steps that help advance innovation in the crypto space.
What About China’s National Digital Currency?
After his keynote speech, Giancarlo was questioned about China’s development of its own central bank virtual currency and whether the country‘s rapid development could actually be a threat to the dominance of the U.S dollar.
Giancarlo responded that the purpose behind the creation of the digital dollar is not to compete with a digital yuan or digital Euro.
He, however, conveyed that it is essential to keep pace with the changing financial system of the world, one where digitization would replace an old-fashioned fiat currency that cannot serve in the digital world.