Cashless society is going to use a form of digital currency known as e dollar. Digital currency is slowly becoming part of our world as the governments and banks move forward with the idea of abolishing cash.
The E Dollar is simply a digital currency that has an exchange rate with cash. The central bank would set a rate at which old paper dollars would lose value against E Dollars held in a bank account.
Under an E-Dollar system any physical cash removed from the banking system would lose value against the E Dollars retained in an account, this would effectively eliminate the zero lower bound. Central banks would be free to implement significantly negative rates.
The E Dollar would also a carry the added optional benefit of a gradual debt jubilee if the powers that be decided to allow old debt to remain denominated in old dollars.
The latest is how major central banks are considering direct issuance of cryptocurrencies. There was recently a meeting held in Beijing with representatives from the Peoples Bank of China, including Governor Zhou Xiaochuan, where the creation of an E Yuan was discussed.
In addition to this, Andy Haldane, Chief Economist at the Bank of England, suggested an E Pound concept in September.
In January of 2015 David Andolfatto the vice president of the Federal Reserve Bank of St Louis said the following during a presentation:
“In short, Fedcoin is essentially just like digital cash. Except in one important respect. Physical cash is still a superior technology for those who demand anonymity (see A Theory of Transactions Privacy). Cash does not leave a paper trail, but Fedcoin (and Bitcoin) do leave digital trails. In fact, this is an excellent reason for why Fedcoin should be spared any KYC restrictions. First, the government seems able to live with not imposing KYC on physical cash transactions–why should it insist on KYC for digital cash transactions? And second, digital cash leaves an digital trail making it easier for law enforcement to track illicit trades. Understanding this, it is unlikely that Fedcoin will be the preferred vehicle to finance illegal activities.”
Finally, the proposal for Fedcoin should in no way be construed as a backdoor attempt to legislate competing cryptocurrencies out of existence. The purpose of Fedcoin is to compete with other cryptocurrencies–to provide a property that no other cryptocurrency can offer (guaranteed exchange rate stability with the USD). Adopting Fedcoin means accepting the monetary policy that supports it. To the extent that people are uncomfortable with Fed monetary policy, they may want to trust their money (if not their wealth) with alternative protocols.”
Because why would you want to stop the E Dollar/Fedcoin Beta test to early when you are still gathering good information and research from it?
There have been plenty of stories in the alternative financial media on cash bans, negative rates and debt jubilees, but none about doing it in one fell swoop with an E Dollar concept. Just doing a cash ban and negative rates would not be as effective as an E Dollar as covered here but additionally terms like cash ban, negative rates and debt jubilee could have some very negative connotations with the public. The E Dollar/Fedcoin on the other hand could be sold as innovation, and who wants to stand in the way of progress. The millennial generation, of which I am a member, could easily accept the new cryptocurrency and blow off naysayers as just “not getting it”.
It’s about time we start paying attention to the clear trend toward a possible E-Dollar/Fedcoin, it’s consequences, and how to position ourselves accordingly.