YANIS Varoufakis has called for Central Banks to “cut out the middleman” by creating their own cryptocurrencies.
The former Greek finance minister – who has been a severe critic of Bitcoin but has lauded the benefits of blockchain technology – said private banks needed to be pushed out of the equation in order to better serve the people.
Currently, Central Banks print money to lend to commercial banks, who in turn lend to corporations and individuals.
But Varoufakis is keen to democratise the monetary system by fusing the individual with the Central Bank.
He told the Greek Reporter: “Central Bank cryptocurrencies, digital money is the way to go. That would kill more than two birds with one stone.
“We need to cut out the middleman: The Federal Reserve gives money to the banks they lend to corporations.
“Now what if the Fed wants to stimulate the economy and gives every tax payer in the US a digital account. The money goes directly to the Federal Reserve. The whole point is cutting the middleman.”
Last month the Financial Times reported that “nearly 90 per cent of the world’s central banks have launched projects on issuing digital currencies, according to the Bank for International Settlements.”
Central Bank-backed digital currencies would be issued, backed and controlled by domestic national banks – such as the Bank of England. It is seen as a way for Central Banks to compete with the current decentralised model.
He illustrated his point through the process of buying a book from Amazon, claiming that private banks don’t deserve to be “cut into your deal” when they do nothing.
“They do charge because banks have the monopoly of the payment system,” he added.
With a digital account linked to the Central Bank, money could be directly deposited to individuals when the economy needs stimulation. To Varoufakis, it would be transparent while also maintaining anonymity.
He said: “Politicians and governments could not pull a fast one over you as a citizen, while at the same time you will preserve complete anonymity.
“With a Fed digital reserve based on blockchain everybody would know how much money is in the system.
“That’s how the blockchain could help create a political version of cryptocurrency, that can be controlled democratically.”
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