Boston Federal Reserve VP Describes The Limits Of Cryptocurrency Partnerships

Federal Reserve Bank of Boston Vice President Jim Cunha discussed his views on cryptocurrency adoption and limitations at Forbes' Annual 30 under 30 Summit on Oct. 2, highlighting asset security remains a significant concern for institutions.

Cunha spoke at length about the issues voiced by central banks when it comes to embracing cryptocurrencies within their existing framework.

The Federal Bank VP is no stranger to blockchain technology.

The Boston bank boasts of a 200-member strong team dedicated to exploring decentralized applications on Ethereum and IBM's Hyperledger Fabric.

For Cunha, central banks are not opposed to the borderless, transparent, and immutable features that blockchain-powered systems offer.

In comparison, a majority of ICO projects-which have approachable developers and members-border on the dishonest side of the cryptocurrency sector with tall promises and lack of technology use cases.

Despite the lack of cohesion amongst blockchain projects and governments, Cunha cited the Monetary Authority of Singapore's Project Ubin as an example of how central banks realize the potential threat from cryptocurrencies.

The banking veteran added that multiple central banks across the world, such as Sweden's Riksbank, provide insight on a futuristic, state-controlled cryptocurrency powered by a public blockchain.

For most, a state-backed digital token would circumvent the ethos of cryptocurrencies and unnecessarily try to infiltrate a banking system that works well for the most part.

Referencing the launch of Circle's aptly-called stablecoin "USD Coin," Allaire argues a price-stable currency could kickstart trading between global markets for cryptocurrencies and other isolated asset classes, apart from enabling off-hours trading.