Blockchain may be the new bet of the Federal Reserve of San Luis, United States

The central banks of the United States continue to innovate in the field of financial operations with distributed accounting technologies and cryptocurrencies. This week the Federal Reserve of San Luis, in the state of Missouri, would have published a document on the data thrown in the latest research for the improvement of its financial services at the local level, an exploration that would have taken into account Bitcoin and other platforms decentralized as an advantageous solution for the government entity.

The document entitled "The case of electronic money of the central bank and the non-case of the cryptocurrencies of the central bank" was published by the Federal Reserve on behalf of the researchers Aleksander Berentsen and Fabian Schar. The publication highlights that cryptographic currencies have different components and units that allow decentralized transaction processes in virtual representation, characteristics that keep the central bank interested in a proposal of financial services for citizens.

The Federal Reserve of Missouri is following the implementation of a proposal so that citizens can open bank accounts in the government institution, allowing them to carry out operations with the money of the central bank instead of commercial bank deposits with third parties.

In this sense, the entity seeks to generate "electronic money from the central bank for all," a proposal that has its pros and cons, and that could be carried out by means of cryptographic currencies. But what is the reason for the incorporation of cryptocurrencies into central bank systems? The Federal Reserve of San Luis believes that digital assets have the potential to transform the payment infrastructure, financial systems and any registry maintenance platform.

Bitcoin is the first virtual money for which the property rights of the different monetary units are managed in a decentralized network. There is no central authority, no boss or administration. And yet, it still works.

In this way, Bitcoin and cryptoactives in general become the fundamental innovation to carry out virtual money transactions with decentralized systems, two characteristics that include positive elements of both cash and electronic, balanced in a single unit.

We would like to emphasize that the decentralized management of ownership of digital assets is a fundamental innovation. It has the potential to alter the current payment infrastructure and the financial system. In general, it could affect all companies and government agencies involved in record keeping.

Likewise, the Central Bank considers the competitive and participatory capacity of cryptographic currencies to be positive, since through mining they allow community understanding of all individuals who use the network and wish to be an active part of it. An element that could lower the price of maintaining systems and eliminate intermediaries.

If the distributed accounting technology is applied in the systems of this financial institution, the Federal Reserve of San Luis could solve the problems of vulnerability of the centralized banking systems, offering electronic services of easy access.

However, in order to achieve this, the Central Bank is considering the potential risks associated with the application of cryptocurrency services to the local financial economy. Therefore, they also take into account the need to introduce new anti-money laundering (AML) measures and know-your-client (KYC) standards, as well as the eradication of transaction anonymity.

The distinctive feature of cryptocurrencies is the decentralized nature of transaction handling, which allows users to remain anonymous and allows access without permission. These key features are a red flag for central banks, and we predict that no reputable central bank would issue a decentralized virtual currency where users can remain anonymous. The reputation risk would simply be too high. On the contrary, central banks could issue electronic money from the central bank. This money would be strictly controlled by them, and users would be subject to the standard KYC ("know your customer") and AML ("anti-money laundering") procedures.