Dear Fellow Patriot,

The Federal Reserve just can't stand the
thought of anyone competing with their central banking cartel.

Since the $6 trillion CARES Act passed and
was signed on March 27th by President Trump, the price of the
cryptocurrency Bitcoin has doubled from around $6,500 to $13,000.
That's in no small part due to the unprecedented money printing
by the Fed, to fulfill the terms of this bailout.

Of course, when the Fed sees this predictable
move in a competing currency, they start thinking they have to
launch their own cryptocurrency, before the dollar finally
implodes.

While Bitcoin may still not be a very widely
used way to pay for goods and services, another digital money
platform, PayPal, has really taken off in that regard.

PayPal is perhaps the best way ever designed
to move money from one person to another. Yet it started in
failure.

In his book, "Zero to One: Notes on Startups,
or How to Build the Future," founder Peter Thiel explains that
PayPal was originally intended to allow owners of PalmPilots to
beam money to each other. That idea did not work, but it evolved
into using similar technology on eBay auctions.

The point is PayPal was a private company
competing in the market economy. That meant it was subject to
market discipline. It had to develop an effective product or it
would go out of business. The same thing cannot be said of the
federal government.

In its latest bad idea, movement is building
for the Federal Reserve to establish its own cryptocurrency
exchange to compete with others in the marketplace and even
replace physical cash.

"It is inevitable," Federal Reserve Bank of
Philadelphia President Patrick Harker reportedly said at a recent
conference. "I think it is better for us to start getting our
hands around it."



It's an apt metaphor, since what the Fed
always wants to choke off is any competition to its monetary
monopoly. This comes hot on the heels of another bad idea, called
FedNow, which is supposed to speed up the processing of financial
transactions.

Speed is great, of course. It can take a full
business day for transactions to clear. That's too slow in our
21st century world of instant communication.

But the Fed is late to the party. The
Clearing House launched a real-time payment system two years ago
that now reaches half the banks in the country. It's expected to
be everywhere by next year.

Judging by the non-answers that the central
bank has given to members of Congress on its interoperability
with private sector systems, FedNow would seemingly not compete
on a level playing field; it would simply use the power of the
federal government to crush a private-sector competitor.

Proponents of a Fed-run crypto exchange argue
that such an exchange could stop the current delays in the U.S.
bank transfers entirely on its own. This thought proves just how
bad the Fed is at making good investments, anticipating changes
in technology, and keeping up with the speed of innovation.

If board members of the central bank believe
that blockchain may soon supplant the need for real-time payment
services like FedNow, why the Fed would spend the next 3-5 years
building FedNow from scratch when The Clearing House already
offers the same type of service is beyond me.

The Fed should stay out of the way and let
the private sector blockchain and real-time payments marketplaces
settle this debate. Instead, the central bank seems poised to set
itself up as both the regulator of all monetary exchanges and a
participant in that business.

Without assurances on interoperability from
the central bank, businesses will always choose the Fed's
offerings instead of a private company's, since doing so would
make the business look better to its regulator.

The Fed cannot handle real competition, and
so it is trying to shut it down. It worries about Bitcoin, it
worries about The Clearing House, and it will be worried about
the next bright idea for money sharing that comes along. It's got
a monopoly to protect.

We need to open up the field for new forms of
money. While I served in Congress, I introduced the Free
Competition in Currency Act, which would have defined money as
whatever people are willing to trade with each other, whether
that's paper, tokens of some sort, or direct barter. It would
have ended the Fed's power to declare that only certain pieces of
paper are currency.

Let's allow companies to compete, and let the
market set the value. That's where the next PayPal will come
from, and consumers everywhere will be the winners.

For Liberty,

Ron Paul, M.D.
Chairman








Respect for the Constitution, the rule of
law, individual liberty, sound money, and a
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