The head of the Fed allowed the use of the system …

The head of the Fed allowed the use of the system …

Fed head admits the use of Ethereum-based system to determine the interbank rate

The head of the US Federal Reserve System Jerome Powell, in a written statement on May 28, admitted the possibility of using the AMERIBOR system as an alternative to the London Interbank Offered Rate (LIBOR) – the benchmark interest rate on the interbank market. Forbes draws attention to this. AMERIBOR uses a proprietary version of the Ethereum blockchain with limited access to collect information on interbank lending rates.

Powell responded to Senator Tom Cotton who was interested in using additional alternatives to replace LIBOR.

“During today’s hearing, you spoke about leaving LIBOR and the interest of banks in this issue. It was gratifying to hear that the Federal Reserve is working with these banks to support their endeavors to use a lending-relevant rate. Is it appropriate to use Ameribor if the rate provides more accurate funding cost information for a particular institution? ” – wrote Cotton.

In response, Powell said that the Fed supports the dollar SOFR rate as an alternative, but its use is voluntary, and market participants should consider their own conditions when choosing one or another solution. He praised the reliability of AMERIBOR, but noted that this rate may not be the first choice for most financial institutions..

There have been several scandals associated with LIBOR when bankers manipulated the rate to their advantage. Last year, the head of the Federal Reserve Bank of New York, John Williams, called for an early drop from the London rate..

The head of the Fed allowed the use of the system ...

AMERIBOR’s developer American Financial Exchange (AFX) claims blockchain has the potential to transform the electronic trading and financial markets. The AFX system uses two ERC-721 identification tokens for each of the parties to the transaction. They are automatically issued by the platform upon opening a deal and are also calculated at the final stage. AFX blockchain is based on the Proof-of-Authority consensus mechanism, which allows the issuer to maintain a significant degree of control over the transactions in the system.

Powell called the crypto space a “giant trash can” in February..

The head of the Fed allowed the use of the system ...

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