WASHINGTON—The Fed along with the central banks of several other nations said they are exploring the creation of state-backed digital currencies that would allow consumers and businesses to have digital wallets from which they could buy, sell and trade.
“A former Federal Reserve executive believes it's only a matter of time before central banks adopt a form of digital currency that could look like Bitcoin, and will offer a more convenient and anonymous way for businesses and consumers to buy and sell goods and store wealth,” wrote Lucas Mearian, in a ComputerWorld report.
“The advent of a government-backed, peer-to-peer digital currency would likely be based on a blockchain-based electronic ledger, and it could signal the beginning of a cashless economy, not unlike what's occurring today in Sweden. It also may simply complement the modern-day current cash-based system,” Mearian said.
The percentage of cash in circulation as a function of Sweden's gross domestic product has fallen dramatically in recent years; cash now represents less than 1.2% of that nation's GDP, Mearian noted.
"So, cash is really disappearing in Sweden. It's not accepted at many businesses and many banks won't deal with cash anymore," said Rod Garrett, an economics professor at the University of California at Santa Barbara, in the ComputerWorld report.