Stephen Moore, a former nominee by President Donald Trump to join the Federal Reserve, has announced his intention to launch a new stablecoin.
Moore, who was picked by U.S. President Donald Trump earlier in the year as a candidate for the Fed, says he is partnering with Ralph Benko and Everipedia co-founder Sam Kazemian, and will serve as chief economic officer for the project.
The stablecoin, titled Frax, will be backed by a fractional reserve as opposed to being pegged tothe value of the U.S. dollar or another fiat currency. Frax will be able to generate interest by leveraging the reserve via loans, which should keep the price of the coin stable.
Moore commented on the disruption Frax and stablecoins pose to the traditional financial markets,
Central banks will soon feel the competition from private currencies such as Frax. The days of government monopoly of currencies by central bankers is coming to a screeching halt.
He continued,
Currencies are intended to retain their value over time, but given the wild gyration in values of currencies and the struggle in many countries with hyperinflation, we need a global currency that has a stable value to benefit consumers, businesses and investors.
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