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The Federal Reserve VP describes the limits of partnerships in cryptocurrency

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Jim Cunha, vice president of the Federal Reserve Bank of Boston, on stage with Forbes journalist Michael del Castillo at the Forbes 30 Under 30 Summit in Boston. (1 October 2018)

Jim Cunha, vice president of the Federal Reserve Bank of Boston, on stage with Forbes journalist Michael del Castillo at the Forbes 30 Under 30 Summit in Boston. (1 October 2018)Randy Pekich

The Federal Reserve Bank of Boston is only a ten minute walk from Boston's City Hall Plaza, where Forbes hosts its annual 30 Under 30 Summit.

To help kick off two-day events, Federal Reserve Treasury and Financial Services Vice President Jim Cunha has joined the cryptocurrency leaders of the industry to talk about the influence that the blockchain is having on the way people think about money and how to do it.

During a 20 minute conversation, Cunha illustrated some of the blockchain experiments in the first phase that his team of 200 has undertaken using ethereum and Hyperledger Fabric. Cunha also explained how the branch of the US central bank interacts with other currency issuers and startups to learn more about how the blockchain works.

But the biggest obstacle Cunha says that central banks face when it comes to embracing speed and the absence of blockchain borders is not technological. Rather, the 30-year veteran of the Federal Reserve says it is uncertain about the safety of the organizations that build blockchain that worries him the most.

"We always use private companies," said Cunha, who has been at the central bank for more than 30 years. "I do not know if we'll ever do it with cryptocurrency".

Many developers in the open source blockchain ecosystem have chosen to remain pseudonymous and scams involving technology have proved to be an effective way to make money with technology. In the meantime, however, Cunha wastes no time in exploring technology from within.

He mentioned several other projects, including the Monetary Authority of Singapore Monetary Authority of Project Ubin and Clearmatics Technology, as examples of how central banks are already influenced by the world of cryptocurrencies.

Notwithstanding Cunha's careful consideration of how third-party cryptocurrency companies could directly collaborate with central banks, he also listed the multiple efforts of the central bank, including work done in Sweden, as examples of what at his Notice could lead to a state control currency issued on a blockchain.

"I'm five years old," Cunha said.

At first glance, the issuance of a cryptocrrency with some of the price controls implemented by central banks may seem like unnecessary work to fix a system that works well enough for many people. But another speaker of the event, the founder of Circle Internet Financial, Jeremy Allaire, thinks that the integration of cryptography and fiat can lay the groundwork for new types of markets.

Last week Allaire officially launched USD Coin, a cryptocurrency fueled by the American public blockchain and backed by the US dollar. Allaire argued that by supporting tokens with a more stable currency, he could first enable overtime trading, and eventually start trading between the markets around the world that are normally isolated.

Cunha's loan support to Cunha's concerns, however, was a panel on how to correct the uncritical reputation of cryptocurrency. Speakers such as Jalak Jobanputra, Future Perfect Ventures founder, Yin Wu, founder of Dirt Protocol, and Will Warren, co-founder of 0X, talked about how the prices of many cryptocurrencies increased in 2017 and a proliferation of poorly controlled projects led to a rebirth of skepticism.

But to cover these concerns, the speakers also reflected on the distrust they see in the traditional financial sector, especially by millennials. While Allaire tried to earn that trust by integrating the new technology with some of the old stability, panelists from a second panel focused on other possible solutions.

Speaking of a jury that the cryptocurrency would be a viable medium of exchange, MIT's director of digital currency Neha Narula, joined the co-creator of the Lightning network to accelerate bitcoin transactions, Tadge Dryja and Linda Xie, the founder of the venture capital company Crypto-token Scalar Capital to argue that the new technology, not the traditional currency, was the best way to widespread use.

One thing that all speakers had in common was to focus on reimagining how monetary systems can be from scratch.

Meltem Demirors, Chief Strategy Officer of the London cryptography investment research company CoinShares proposed to consider the unconventional variables of a monetary system such as equity, social access and system equality when he imagines new ways of transferring money.

"Now we have to work together to define the future of those who have the right to print money and those who have the right to define for ourselves individually and collectively what is valuable", concluded Demirors.

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Jim Cunha, vice president of the Federal Reserve Bank of Boston, on stage with Forbes journalist Michael del Castillo at the Forbes 30 Under 30 Summit in Boston. (1 October 2018)

Jim Cunha, vice president of the Federal Reserve Bank of Boston, on stage with Forbes journalist Michael del Castillo at the Forbes 30 Under 30 Summit in Boston. (1 October 2018)Randy Pekich

The Federal Reserve Bank of Boston is only a ten minute walk from Boston's City Hall Plaza, where Forbes hosts its annual 30 Under 30 Summit.

To help kick off two-day events, Federal Reserve Treasury and Financial Services Vice President Jim Cunha has joined the cryptocurrency leaders of the industry to talk about the influence that the blockchain is having on the way people think about money and how to do it.

During a 20 minute conversation, Cunha illustrated some of the blockchain experiments in the first phase that his team of 200 has undertaken using ethereum and Hyperledger Fabric. Cunha also explained how the branch of the US central bank interacts with other currency issuers and startups to learn more about how the blockchain works.

But the biggest obstacle Cunha says that central banks face when it comes to embracing speed and the absence of blockchain borders is not technological. Rather, the 30-year veteran of the Federal Reserve says it is uncertain about the safety of the organizations that build blockchain that worries him the most.

"We always use private companies," said Cunha, who has been at the central bank for more than 30 years. "I do not know if we'll ever do it with cryptocurrency".

Many developers in the open source blockchain ecosystem have chosen to remain pseudonymous and scams involving technology have proved to be an effective way to make money with technology. In the meantime, however, Cunha wastes no time in exploring technology from within.

He mentioned several other projects, including the Monetary Authority of Singapore Monetary Authority of Project Ubin and Clearmatics Technology, as examples of how central banks are already influenced by the world of cryptocurrencies.

Notwithstanding Cunha's careful consideration of how third-party cryptocurrency companies could directly collaborate with central banks, he also listed the multiple efforts of the central bank, including work done in Sweden, as examples of what at his Notice could lead to a state control currency issued on a blockchain.

"I'm five years old," Cunha said.

At first glance, the issuance of a cryptocrrency with some of the price controls implemented by central banks may seem like unnecessary work to fix a system that works well enough for many people. But another speaker of the event, the founder of Circle Internet Financial, Jeremy Allaire, thinks that the integration of cryptography and fiat can lay the groundwork for new types of markets.

Last week Allaire officially launched USD Coin, a cryptocurrency fueled by the American public blockchain and backed by the US dollar. Allaire argued that by supporting tokens with a more stable currency, he could first enable overtime trading, and eventually start trading between the markets around the world that are normally isolated.

Cunha's loan support to Cunha's concerns, however, was a panel on how to correct the uncritical reputation of cryptocurrency. Speakers such as Jalak Jobanputra, Future Perfect Ventures founder, Yin Wu, founder of Dirt Protocol, and Will Warren, co-founder of 0X, talked about how the prices of many cryptocurrencies increased in 2017 and a proliferation of poorly controlled projects led to a rebirth of skepticism.

But to cover these concerns, the speakers also reflected on the distrust they see in the traditional financial sector, especially by millennials. While Allaire tried to earn that trust by integrating the new technology with some of the old stability, panelists from a second panel focused on other possible solutions.

Speaking of a jury that the cryptocurrency would be a viable medium of exchange, MIT's director of digital currency Neha Narula, joined the co-creator of the Lightning network to accelerate bitcoin transactions, Tadge Dryja and Linda Xie, the founder of the venture capital company Crypto-token Scalar Capital to argue that the new technology, not the traditional currency, was the best way to widespread use.

One thing that all speakers had in common was to focus on reimagining how monetary systems can be from scratch.

Meltem Demirors, Chief Strategy Officer of the London cryptography investment research company CoinShares proposed to consider the unconventional variables of a monetary system such as equity, social access and system equality when he imagines new ways of transferring money.

"Now we have to work together to define the future of those who have the right to print money and those who have the right to define for ourselves individually and collectively what is valuable", concluded Demirors.

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