Write 2 Paragraphs on the Following Article: https://www.cnbc.com/2017/11/29/fed

Question

Write 2 Paragraphs on the Following Article:

https://www.cnbc.com/2017/11/29/federal-reserve-starting-to-think-about-its-own-digital-currency-dudley-says.html

The paragraphs needs to have

1. A discussion of how the article relates to or illustrates macroeconomics and other economics terms

2. A brief discussion of how this article relates to you.

The Article:

Federal Reserve starting to think about its own digital currency, Dudley says

Jeff Cox | @JeffCoxCNBCcom

Published 11 Hours Ago  Updated 9 Hours AgoCNBC.com

As the price of the cryptocurrency continues to soar, the Federal Reserve apparently is giving thought to having a product like bitcoin for its own.

William Dudley, president and CEO of the Federal Reserve Bank of New York, said at a conference Wednesday that the Fed is exploring the idea of its own digital currency, according to reports from Dow Jones.

Any product likely would be well off in the future, he said, adding that it would be "very premature" to estimate when the Fed would come up with its own offering, according to Bloomberg.

That sentiment comes even though Dudley said he views bitcoin is "more of a speculative activity" and not a stable store of value.

As the central bank official spoke, bitcoin struck a new high. Just a day after hitting $10,000, it eclipsed the $11,000 mark.

Dudley is not the first Fed official to address the surging popularity of bitcoin.

Philadelphia Fed President Patrick Harker, in remarks made at a conference in September, said he doubted bitcoin would ever undermine the U.S. dollar, primarily because it lacks the backing of a government.

"The paper that's in your pocket, that we call money, only has value because we believe it has value, because we believe the government stands behind it. It's all trust issues," Harker said, according to a Coindesk report.

Earlier in the year, Minneapolis Fed President Neel Kashkari also expressed skepticism about bitcoin ever emerging as a currency, though he said the blockchain technology behind it has "potential" for further development.

Blockchain records digital transactions, key to the trading of bitcoins, which are not actual coins but rather a payment system created online.

The New York Fed did not immediately respond to a CNBC request for additional information on Dudley's remarks.

Explanation / Answer

Rising price of cryptocurrency is shifting the attention of the Federal reserve towards Bitcoin. The decision of the Fed is assumed to be premature by Bloomberg. According to the President and CEO of the Federal Reserve, Bitcoin is "more of a speculative activity" and not a stable store of value. This article basically analyses the prospects and the disadvantages of introducing an alternative supportive currency measure in the economy. Various macroeconomic terms such as foreign exchange, monetary measures, economic development, currency valuation etc has been considered in the key to the trading of bitcoins. In the dynamic business environment, digital transactions and online payment systems are being focused on in order to make transactions time as well as cost efficient since it has a broad potential for further development.

This article is closely related to me since any decision in my state which is concerned with specific economic reform has a direct impact on my life. Greater focus on bitcoin and digital transactions act as a chainbreaker and may help in an out of the box reform which would surely have a major impact on the lives of the citizens. Any measure of the Fed aiming towards economic reform and developement has a direct relation with the day to day life of the individuals.

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