Renowned crypto advocate US Congressman Warren Davidson who is well known among the crypto worshippers due to his Token Taxonomy Act is now proposing the tokenization of the US dollar.
In a series of tweets, Davidson asked about the impact tokenization of the dollar would have in the world.
Appearing in a recent CNBC’s show “Squawk Box” Morgan Creek Digital’s Anthony Pompliano said that it was time that the US government becomes serious in tokenizing the dollar.
Pompliano also stated that the US federal government should move with hurry to issue its own virtual currency to counter the expected Chinese digital Yuan. he argued that a digital Chinese yuan may be highly adopted if they the country goes ahead and launches the currency. China is expected to roll out its central bank digital currency (CBDC) probably next month.
During the interview, some of the followers wondered why there was a need to have another tokenized dollar yet there other payment solutions like PayPal.
However, Davidson gave out various reasons why digitalization and tokenization are different saying that tokens are meant to be stored on a distributed ledger. In addition, tokens cannot be controlled by the creators or central authority who always have a vested interest. Davidson also explained that tokens can be transferred without intermediaries like banks.
Despite the strong advocacy for tokenization of the dollar, in the recent past, the Federal Reserve Chair Jerome Powell indicated that the US central bank has no plans in the near future to launch its own cryptocurrency.
In a recent past, Simon Potter a former Fed official explained that he sees no reason that would warrant the replacement of the US digital dollar with a cryptocurrency. He said that there is no need to create anything that is complicated when there large liquid capital markets in the country.
U.Today reports that in June, former FDIC chairperson Sheila Bair had suggested that the time was ripe for the Fed to develop its own digital currency in order to eradicate various frictions that are present in the payment system.