[mikro2nd]

Not sure why NYT is taking some "former governor's" opinion on this. Let's take a look at what the Fed itself (themselves?) think. Quite recently (2018-04-16): "The Case for Central Bank Electronic Money and the Non-case for Central Bank Cryptocurrencies" at https://research.stlouisfed.org/publications/review/2018/02/...

In a nutshell, the St. Louis Fed thinks there's no good case for central banks to get involved in creating cryptocurrencies (though there is a case for fiat electronic money). ISTR that the Swiss National Bank expressed pretty-much the same opinion, too, not more than a few weeks ago.

[stephen_g]

It's worth noting that most central banks already do have electronic money (called 'central bank reserves'), which commercial banks use for settling inter-bank payments between each other, as well as transfers to and from the Government (Government spending into private bank accounts, tax transfers to the Government from private bank accounts, and the purchasing of Government bonds and securities).

What the linked paper is talking about (it's also part of the Swiss proposal) is to provide accounts for private individuals (not just banks and large financial institutions) to access this kind of money. The advantage is zero risk of losing your money (unlike commercial banks it wouldn't require the Government having to bail anyone out or insure anything), but the downside is reserves don't attract any interest.