This year’s annual report examines a project the Fed is spearheading to improve the U.S. payment system. The essay is written by St. Louis Fed First Vice President David Sapenaro, who recently completed his responsibilities as the project’s interim payments strategy director.View Publication
In recent months, Bitcoin and other virtual currencies have fueled the public's imagination as Bitcoin's value against the U.S. dollar skyrocketed and as more and more merchants announced they would begin accepting it as payment. However, the exchange-based and non-regulated nature of virtual currencies makes them vulnerable to volatility and speculative trading and has led to the perception they can be easily used for illegal transactions. Several countries have either banned their use or issued warnings.