President Donald J. Trump's former pick for the Federal Reserve will issue a stablecoin backed by a fractional reserve.
Stephen Moore, who was nominated by Trump to join the Fed earlier this year, is partnering with former Reagan deputy general counsel Ralph Benko and Everipedia co-founder Sam Kazemian to launch a new stablecoin called Frax.
Moore will serve as the co-founder and chief economic officer of Frax, the company behind the stablecoin, with Kazemian being the other co-founder.
“Central banks will soon feel the competition from private currencies such as Frax," said Moore in a statement. "The days of government monopoly of currencies by central bankers is coming to a screeching halt. 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."
According to the statement, Frax will not be backed one to one by a U.S. dollar reserve. Instead, the reserve will be loaned out and generate interest to ensure that the value of Frax stays close to one dollar.
Previously, Moore has served as a campaign adviser to Trump. Meanwhile, Benko had worked for the blockchain advocacy group Chamber of Digital Commerce as a counselor before joining Frax as the general counsel.