According to a report from Fortune, former campaign advisor and former pick for the Federal Reserve Stephen Moore announced plans to issue a stablecoin. The stablecoin will reportedly be called Frax, and will be backed by a fractional reserve of US dollars.
Being backed by a fractional reserve means that Frax will not be pegged one-to-one to the US dollar. Instead, the reserve will be loaned out, which will purportedly generate interest in order to ensure that the value of Frax remains fixed to the dollar.
In order to launch the new cryptocurrency, Moore, who will serve as co-founder and CFO, is partnering up with Everipedia co-founder Sam Kazemian, who will also serve as co-founder, and former junior Reagan White House official Ralph Benko, who will be providing general counsel to Frax.
Stephen Moore was quoted in a statement related to the announcement of Frax, “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."
"Central banks will soon feel the competition from private currencies such as Frax," he added.
The Frax stablecoin is expected to launch in the upcoming months.