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Trump’s Former Fed Pick Stephen Moore Announces Cryptocurrency to Compete With Central Banks
The new Frax stablecoin project by the former federal reserve nominee Stephen Moore will be supported by Ralph Benko who is now a former deputy general counsel for Reagan. Economist Stephen Moore, an economic commentator and a former member of The Wall Street Journal editorial board, is planning to launch a Stablecoin dubbed Frax.
Moore is the co-founder of the new Frax stablecoin along with Sam KAzemian who also co-founded Everipedia. Benko will now be the general counsel. Earlier this year, President Donald Trump nominated Moore to join the Federal Reserve and help manage the nation’s currency. However, the nomination fell short. On Tuesday, Moore and his partners will officially announce plans for the digital currency. It will be pegged to the U.S. dollar so its value will be more stable than other cryptocurrencies like Bitcoin.
Moreover, Stephen Moore has vocally opposed the Federal Reserve’s current plans and interest rate raises. He’s a television commentator on economic issues and also a writer for various financial media outlets. Most recently, he has been speaking on the government’s “monopoly” on the U.S. dollar. Launching a Stablecoin seems to be a logical step.
Frax is a stablecoin that is set to launch early next year which is built on a decentralized fractional reserve system which is a type of banking system where the banks can loan out customer funds and only hold a small proportion of the funds on-site for the customers to withdraw. Unlike other banks that hold fiat currencies, Frax’s reserve assets will be the Frax tokens which are a stablecoin that tracks the dollar but is not really backed by it. The protocol of the coin hopes to use existing DeFi products such as compound finance and dYdX to loan the DAI and Tether tokens as collateral and will also adjust the price of interest payments to make adjustments to the value of the currency.
The new interest payments will go back into the Frax smart contact which buys back or will rebalance the supply of Frax in the market to keep each Frax token at $1. In order to reduce further risks, Frax was previously called Decentral Bank and will not hold close to 100 percent of the funds in the reserves when it launches and will also slowly hold fewer funds in its reserves as the network becomes much more popular. Frax says that the new tokens will be held in a non-custodial manner on the blockchain making sure that the confidentiality is present over how the funds are spent.
Unlike Facebook’s stablecoin project-Libra, the power is evenly distributed between more than twenty companies. Frax, on the other hand, is completely decentralized but the bigger goal according to Moore is to end the world’s dependence on the FED-controlled US dollar. The project is expected to make a blast on the market and there are plenty of enthusiasts that are extremely happy for the new project.
Basically, a Stablecoin is a digital currency pegged to a relatively stable asset, most of the times a fiat currency or gold. Fax may raise eyebrows in this regard, as it will depend on a fractional reserve.
Basically, Frax will rely on a fractional reserve. Fax will not be backed by a one-to-one pool of reserve dollars. Instead, Frax will rely on algorithms to loan out its reserves and collect interest, while also maintaining the value of Frax pegged to a dollar. According to the company, loans will all be recorded on Blockchain. This will eliminate the need for a central bank.