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IPFS News Link • Federal Reserve

Fed Chair Jerome Powell Discusses Leveraging an Ethereum-Based Libor Replacement

•, by Jamie Redman

The United States Federal Reserve has expanded a great deal since the start of the coronavirus outbreak and a few months prior as well. This week a letter to Senator Tom Cotton from Fed Chair Jerome Powell indicates the Fed is contemplating using Ethereum for interest reference rates.

For instance, the Fed and many other international central banks leverage Libor, a benchmark interest rate where a great number of global financial incumbents use to lend funds to each other and clients.

However, the public is well aware of the "Libor scandal," a theory that claims that banks and Libor were manipulating rates in order to fleece the populace. Banks are supposed to submit realistic interest rates to Libor, but the organization and member institutions are accused of manipulating the benchmark rates since 1991.

"The way the inter-bank, or Libor, interest rate is set is no longer fit for purpose," explained a written review by the Financial Services Authority. The megabank Barclays was one of the big name banks accused of messing with the Libor rates.