The chief legal officer for Coinbase is urging the private sector players to join forces and come up with a tokenized version of the US dollar.
According to Brian Brooks, the time has come for the development of a digital US dollar but the major issue should be the one to lead the initiative, the private sector or the government.
Brooks in an article published in Fortune, opined that private firms should come together to develop a virtual US dollar. He explained that the government should only come in with favorable regulations rather than be the one to lead the initiative. Brooks explained that the best way to go about it is to allow the private actors within the crypto and financial industry to develop the digital currency while government agencies offer regulation guidelines.
Brooks suggests an unofficial public-private agreement where the private sector will allow the government to control the fiscal aspects while the government allows the private sector to control the technological aspects of the digital currency.
Brooks’ suggestions are different from the Libra project. The Facebook’s led stablecoin project has elicited concerns from policy makers around the world with various Congress and Senate members saying that the stablecoin will hard to control or regulate. The idea of pegging the Libra crypto with various worldwide currencies will inevitably dispose the US dollar as the global reserve currency. Several central banks heads like Lael Brainard of US have stated that Libra has the capacity to destabilize the global financial market.
Brooks explained that just like stablecoins pegged on the US dollar do not compete with the dollar, so will a digital dollar. He stated that the Federal Reserve will still maintain the control of the digital dollar.
Brooks explained that more stablecoins will continue to be minted if the government does not come up a guideline to guide the private sector to develop a digital dollar. For now, Brooks calls on the government to ensure that the stablecoins have the requisite dollar reserves they claim to have.
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