Federal Reserve Bank VP: We’re a Protocol Just Like Bitcoin

An interest in bitcoin and digital currency makes Federal Reserve Bank of St Louis vice president and research director David Andolfatto something of a rarity among Fed officials. However, while he may see the technology’s big picture, why he believes bitcoin is potentially transformative doesn’t exactly fall in line with the common mantras of the community.
Take, for instance, the claim that bitcoin is part of a long-term trend toward ‘digital money’, one Andolfatto delights in debunking.
Today, virtually all money used by the private banking sector, and all the money in modern economies, he asserts, is digital.
In a conversation with CoinDesk, Andolfatto went so far as to suggest that the bitcoin network isn’t that much different from the Federal Reserve, and that while ideologically opposed, both are highly similar in their structure and goals. The St Louis Fed is just one of 12 banks that make up the US Federal Reserve System, which supervises state-member banks, bank holding companies and loan holding companies, and provides educational outreach.
Andolfatto said:
‘The way I view the Fed, and any institution, is it’s basically a computer program. Just like bitcoin, it’s an open-source computer program. You ask yourself, ‘What is bitcoin?’ It’s a protocol, it’s a computer program, it’s a constitution, it’s a law, it’s a legal code, it’s basically a constitution that governs the supply of its money and that governs the processing of payments.’

This post was published at Coin Desk on January 18, 2015.