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Will FedCoin Replace the Paper Dollar?

Economy

Will FedCoin Replace the Paper Dollar?

by | Economy

Ben Constanty

CEO, Smartlink

Disrupting online payments with smart contracts.

Digital currencies have taken center stage as of late. Offering many benefits that traditional money lacks, countries have taken a real look into the asset.

With Bitcoin and others already operating, it makes sense the conversation naturally progresses in that direction.

🔎 Key takeaways

  • Paper currency continues to be used less and less as technology expands.
  • FedCoin is a centralized digital currency that brings quicker payments and spending.
  • With Bitcoin and other cryptocurrencies, FedCoin aims to propel the US into a new financial age.

FED’s drive for a digital currency

Fed's drive to switch to FedCoin

The United States have begun exploring the FedCoin, a new centralized digital currency aimed to help both the government and citizens.

It helps the government control the money supply and deploy funds in times of stress with quickness.

Also, it helps citizens as they can receive money quicker and spend it on essentials.

In question though, have we started seeing the end of cash?

If you think about it, we have already started seeing the death of cash. Ask any individual under the age of 30 if they carry cash, and odds are they do not.

Instead, spending money using apps or debit cards. Same can be said for repaying friends or family after a lunch date.

Even in local markets, many vendors utilize phone applications to accept payment.

Cash was used decades ago because the technology in finance simply was not advanced to where it is now.

With Internet and smart phones everywhere, it naturally makes sense for physical cash to slowly diminish.

Potential benefits of FedCoin for the US

Potential benefits of FedCoin

The benefits of FedCoin continue to outweigh physical cash for the most part.

First, it allows the government to quickly disperse funds. In early 2020 when the pandemic began, it was essential to boost the economy as people were quickly forced to stop working and lose jobs.

Having a digital currency and account like FedCoin, it would allow for quick direct payments.

Secondly, it can give the government greater control over inflation or deflation.

There is a delicate balance the Fed continues to ride and if it gets out of hand, it can negatively impact the economy.

By tracking funds better, the government can react with greater precision.

FedCoin could cause possible slowdowns

Potential slowdowns due to FedCoin

The one thing FedCoin depends on is technology, and there is a potential for some businesses or individuals to not have access to the technology.

For example, Bitcoin is unable to work without an Internet connection and a computer or smartphone.

With FedCoin, there would certainly be a debit card issued but one would still need access to the Internet to obtain information.

Unlike a bank that you can visit, you are not able to visit the Fed. As we continue progressing with financial technology, this gap will continue to close.

FedCoin has a real possibility of eliminating cash and bringing a more effective way of transacting.

We are still several years off, but do not be surprised if in 5 years we are no longer using cash.

However, for now, we can still rely on the good ol’ greenback.

Ben Constanty

CEO, Smartlink

Disrupting online
payments with smart contracts.

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