Economist Stephen Moore decided to create his own stablecoin Frax as an alternative to emitted government money.
Current US President Donald Trump has previously nominated Stephen Moore as a candidate for the post of head of the Fed, but he subsequently decided to refuse. Talking to Fortune
He said that his libertarian views made him believe in cryptocurrencies as an alternative to state money, so he decided to create his own stablecoin.
“I have been observing monetary policy for 30 years and I was always wondering why the state has a complete monopoly on the issue of currency? This is not normal, says the economist. “In a healthy situation, private money must compete with central banks for money supply.”
Moore enlisted the support of Sam Kazemian, co-founder of the Everipedia blockchain encyclopedia. According to both, Frax will appear on the market in the coming months as a stablecoin. It will be created on the basis of existing blockchains. At the moment, the project has no external investors.
The token exchange rate will be tied to the US dollar, however, according to the creators, it will not be fully secured by fiat currency. They decided to try the partial reservation model, in which specialized algorithms will be responsible for asset allocation and interest collection in order to maintain exchange rate stability. The organizers say that the central bank will no longer be needed, because all credit operations will be recorded on the blockchain.
Frax will be announced approximately one year after closing
The Basis stablecoin project, which was supposed to function on a similar principle. The project managed to raise more than $ 100 million with the support of venture company Andreessen Horowitz, but subsequently it faced an unfavorable regulatory environment.
According to the creators of Frax, the failure of the Basis project does not scare them, on the contrary, they hope to take into account all the mistakes of their predecessors and the bitter experience of Moore and Ralph Benko, who was the chief legal adviser in the Reagan administration, and now is one of the leaders of Frax, and yet bring your plans to life.
“Central banks will soon face serious competition from private currencies, including Frax,” said Moore. – The monopoly of the authorities will be over. Currencies should be a tool to preserve value over time, but due to rapid fluctuations in rates and problems with hyperinflation, this becomes impossible. We need a global currency with a stable rate, which will be interesting for consumers, businesses and investors. ”
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