Ex-CFTC chairman proposes digital version of the US dollar

Christopher Giancarlo has an idea. The former chairman of the US Commodity Futures Trading Commission is launching a digital dollar project to develop a virtual currency, which is fully supported by the US government.

For the longest time in human history, money was physical – Rai stones, shells or the physical notes we have used for centuries. But with the introduction of credit and credit cards into the global economy and digital payment systems such as PayPal, Revolut and Venmo, money, at least in the Western world, has begun to transform into a digital form. The thing is that this digital money is far from being efficient: you can’t process it at will, as you would with physical bills, and fees can skyrocket quickly because of the many different digital payment systems.

It should therefore come as no surprise that innovators have been looking for new solutions to balance the current nodes in the global payment system. One such solution, as proposed by the former chairman of the Commodity Futures Exchange Commission (CFTC), Christopher Giancarlo, would be the complete digitization of the dollar. During his speech at this year’s Crypto Finance Conference in St. Moritz from 15 to 17 January, Giancarlo remarked

“We sent a man to the moon. We can send the dollar into cyberspace.”

 

Giancarlo says that his vision includes the digitization of the US dollar:

“The creation of a digital U.S. dollar currency that enjoys the full trust and recognition of the U.S. government, shaped by the U.S. government, the Federal Reserve, and distributed through the traditional banking system.”

 

Rumors of a digital dollar coincide with China’s march towards a digital yuan. Giancarlo continues to clarify:

“[The digital dollar] would not be a Stablecoin. It would actually be a digital dollar. Right now, the dollar comes in two forms: as a coin and as paper. We propose a third form of the dollar: the digital dollar.”

 

Giancarlo says that a digital version of the dollar will keep it competitive on the world stage:

“We believe that a 20th century analog currency really undervalues or underestimates the importance of the dollar in global trade, while deeper into the 21st century digital we really undervalue or underestimate the importance of the dollar in global trade. If you look at the history of human trade, you have usually had multiple currencies, both nation-state currencies and currencies issued by corporations, by railways, by corporations and by public companies.”

 

He continued:

“The last generations in which the dollar has had global supremacy are really almost unprecedented in human history. And I wouldn’t be surprised if we were to go back to an era that is more common in human history, where you have several instruments that serve different purposes. Well, I don’t think that the dollar will, by any chance, lose its importance in the market any time soon.

I think it plays an important role not only for the United States, but also for trade in the global environment. And I think that’s a very good thing, but I believe that the creation of a digital dollar will maintain the importance of the dollar, and at the same time I would like to see its spread. As one of the Winklevoss brothers says: “Optionality is a good thing”. And I think optionality in global trade is also a good thing.”