The U.S. Federal Reserve will not only issue its own cryptocurrency but will also make sure Americans use it. That’s the bold prediction of Doug Casey, a well-known currency forecaster with a track record of correctly calling economic trends. In his latest book, Surviving Fedcoin: How to Protect Yourself (and Profit) from America’s Coming Currency Change, Casey argues that the U.S. government will create its own version of bitcoin—a “Fedcoin”—which he views as “the last arrow” in its monetary quiver.
What is Fedcoin?
Fedcoin refers to a cryptocurrency or protocol issued by a central bank. As early as 2014, analyst J.P. Koning proposed that the Fed could create a new blockchain called Fedcoin or a Ripple-style ledger. The key difference from decentralized cryptocurrencies: the Fed would have special authority to create and destroy ledger entries, and would offer two-way convertibility at 1:1 with paper money and electronic reserves.
Economist Sina Motamedi suggested the simplest approach would be to fork the Bitcoin protocol, letting the central bank adjust block mining rewards at its discretion. This would create a system that is decentralized in transactions but centralized in supply.
In June 2016, central bankers from over 90 countries held a closed-door meeting in Washington D.C. with bitcoin experts. Federal Reserve Chair Janet Yellen opened the conference, which included the IMF, World Bank, and BIS. Adam Ludwin, CEO of blockchain company Chain, delivered a speech titled “Why Central Banks Will Issue Digital Currency,” urging governments to leverage the shift to create new assets.
Casey's Core Argument: Why Fedcoin is Inevitable
Casey argues that the U.S. government is effectively bankrupt, with liabilities far exceeding assets. Social Security is insolvent, 47% of Americans are net recipients of government money, and one-third of federal assets consist of student loans (about $1 trillion). Traditional monetary tools—quantitative easing and near-zero interest rates—cannot sustain a dollar that is losing global relevance.
Fedcoin would likely emerge as a parallel currency, adopted because the government would require its use for tax payments or entitlement benefits like Social Security. Over time, it would become a tool to push toward a cashless society. Casey warns: “Without cash, you have no privacy. If everything goes through a bank account, the government knows exactly what you’re buying, selling, and earning. They can take whatever they want, including your entire account if you become politically undesirable.”
Fedcoin would give the government God-like ability to track wealth, justified by fighting crime. But Casey notes that most underground economy activities are peaceful and provide useful goods. By extracting 30–40% in taxes via Fedcoin, the government would harm the economy while enriching itself.
The Ultimate Social Control Tool
Fedcoin’s programmability could enable restrictions on transactions: fat people banned from buying sugar, gun owners blocked from ammunition, teenagers barred from beer or video games. “They can prohibit anything without passing a law,” Casey says. “If your Fedcoin smartphone or chip isn’t programmed to let you buy that, how will you get it?” This extends existing food stamp restrictions to all areas of life.
Casey’s dystopian prediction that Americans would embrace being physically “chipped” may be doubtful, but the threat of government co-option is real. He compares the coming currency revolution to the Industrial Revolution—but in reverse. Industrialization gave unprecedented freedom; Fedcoin could take it away.
The Shadow of Solution
Governments will try to co-opt blockchain technology, but the intrinsic decentralization of cryptocurrencies may thwart them. Casey believes the best response is to develop better technology that leaves those trying to tame it in the dust. Today’s freedom fighters are those on the cutting edge of crypto innovation.
Fedcoin discussions have continued since 2017, and central bank digital currencies (CBDCs) are now a global trend. For investors and users, protecting privacy and supporting decentralized technologies remain key strategies against potential monetary control.