Insight to All Things Currency and Treasury Management

FiREapps CEO Wolfgang Koester kicked off 2018 by alerting U.S. banking executives about the looming likelihood of a digital dollar.

In “Fed-backed Digital Currency is Inevitable”, a commentary published in American Banker, January 10, 2018, Koester makes a convincing case that a federally-sanctioned, digital currency is on the horizon.

“The Federal Reserve is beginning to take steps toward issuing its own digital currency,” he writes, citing various actions taken by different federal agencies in recent years, dating back to 2013 when the U.S. Treasury Department notified financial institutions it would track digital transactions with the same diligence it applies to cash. Since then, several Federal Reserve officials have voiced enthusiasm for digital currencies and lawmakers have introduced legislation designed “to further expand federal control over digital currencies …”

Legitimizing Digital Dollars


Koester acknowledges expanded federal oversight over cryptocurrencies could make some in the cryptocurrency community uneasy, but he says federal supervision and guidance will help fortify the burgeoning cryptocoin movement. What’s more, he writes, the U.S. is far from alone: Numerous other countries – China, the U.K., France, South Korea, Russia and others – have announced plans to tighten local regulations around digital dollars.

Koester says this makes perfect sense.

“Government interests are — and should always be — about protecting constituents through transparency,” he writes in American Banker. “Regulating digital currencies would not only introduce needed transparency, it would help legitimize them by moving them away from those nefarious elements that continue to hamper mainstream recognition.”

At the end of the day, he says, the outcome will be positive: “All constituents in the financial ecosystem will benefit from a digital dollar and the Federal Reserve recognizes this … Consumers will embrace its convenience. Financial institutions and businesses will appreciate the efficiencies and regulators will welcome the transparency.”

What Digital Dollars Mean for Corporate Treasurers


Koester’s article was only his latest dispatch on the topic of a federally-approved “digital dollar.” In December, CNBC, FoxBusiness and Bloomberg radio all invited Koester on the air to share his insights on the growth of cryptocurrencies and what it means for multinationals.

Regardless of the outlet, Koester’s message to the business executives has been consistent: For corporations wanting to remain competitive and ahead of the digital-dollar curve, CFOs and treasury professionals should be automating their FX programs now.

The reason? Increased acceptance of digital currencies mean corporations will need environments that facilitate split-second transactions. This will be especially true for treasury and finance teams. Automated platforms enable highly-efficient straight-through processes that can keep pace with evolving demands.

Just as multinationals plan for and adapt to changing regulatory environments, new trading policies and tax reforms, Koester says they must plan for an inevitable digital-dollar environment. By introducing highly-efficient automated liquidity and risk-management programs now, he says, forward-thinking corporations will be positioned to benefit financially. This follows a pattern that has played out over the last decade: cutting-edge companies replacing spreadsheets with automated straight-through processes and realizing a substantial ROI as a result. The early adopters of automated FX programs are the ones who will be positioned for the inescapable arrival of a government-sanctioned digital currency.

Next Steps

Is your organization in need of data transfer automation, workflow automation or process automation to improve FX predictability and maximize the value of its treasury professionals? Learn how FiREapps has helped many of the world’s leading multinationals design and implement fully-optimized currency risk management programs.

Unsure how FX automation can protect your organization and improve its financial results? We can show  you.