Fedcoin: A centrally-issued alternative to peer-to-peer currencies

by Alex Delmar

A member of the Federal Reserve Board of Governors left his notebook at a local gentlemen’s club. We present this incomplete memo, found in said notebook, without comment as it speaks for itself.

Memo: internal use only
Fedcoin: A centrally-issued alternative to peer-to-peer currencies
The biggest problem with the so called “virtual currencies” is that we, the Federal Reserve and our associates, are cut out of the money creation process. Unless we can all get good at Bitcoin mining soon, we’re ruined.
Since its’s hard to get Ben to even switch from his AOL account, our friends in Creative Finance have suggested a possible solution: Fedcoin.
Fedcoin is just like a Federal Reserve Note except in the virtual space. Even better, we control it.
They’re easy to make. JPMorgan, Bank Of America, etc. run a modified version of Super Mario Brothers in which Mario’s character is computer controlled. JPM’s Mario would be Mario1, BoA’s Mario would be Mario2, etc. Every time a Mario gets a coin, $100 million dollars in Treasury bills are created and $100 million goes into the account of Mario1, Mario2, or whatever bank’s Mario got a coin. Oh yeah, $100 million in debt gets put on the government’s bill. No one will ever notice.
Only banks can use Fedcoins but they can issue paper notes against their Fedcoin holdings by a factor of 10, 50 or 100 times. We’re still fine-tuning the exact figure.
As paper Fedcoins will decrease in value, people will get rid of them quickly causing a rise in currency usage. This is always a good sign of economic activity by our measure.
Fedcoin is backed by the credit and good faith of the Federal Reserve and the government of the United States of America…

Memo ends here.