Former Federal Reserve Governor Joins with Billionaire VCs to Buy Into Crypto Creation

One of the least likely people one would think would invest in a crypto project just did - a former contender for Federal Reserve chair.

What do a bunch of billionaire venture capitalists have in common with a former governor of the U.S. Federal Reserve?

Cryptos!

The VCs include hedge fund manager Stanley Druckenmiller, and the former Fed governor is Kevin Warsh. They all participated in a recent pre-sale coin offering for Basis, which raised $133 million.

Basis made the announcement Wednesday. In it, it gave a laundry list of the reputable players who invested in its Fintech idea.

All the top players

Formerly known as Basecoin, Basis officials decided to hold a private placement to fund its project.

Investors besides Druckenmiller and Warsh included:

  • Bain Capital Ventures
  • GV
  • Lightspeed
  • Foundation Capital
  • Andreessen Horowitz
  • Wing VC
  • INBlockchain

Basis founder Nader Al-Naji was naturally extremely happy about the raise and the fact that the project was able to attract the top investors in the country.

He wrote in a blog:

Major crypto exchanges, Blockchain wallets, application developers, and economists have also come in to support our effort. We are proud to say that our backers now form an international network of supporters who have come together to help us make Basis the next great monetary system.

What’s Basis?

Given the nature of Basis’ business, it seems fitting that Warsh would be drawn to investing in it. It’s creating a crypto called stablecoin. Plans are for its supply to be controlled by an algorithm instead of a central bank.

Long-term, a stablecoin (a cryptocurrency that’s price-stable relative to fiat, or a basket of fiats) could bring unprecedented levels of accountability to the economies of developing nations. It could be used as a global store of value and mainstream medium of exchange, initially in developing countries with unreliable central banks, and eventually globally.

With the supply being controlled by an algorithm, observers point out how that’s different from Bitcoin and most major cryptocurrencies, which have fixed supplies. For these cryptos, demand changes often leads to volatility.

Interesting about the premise behind Basis is that when its supply needs to expand, newly-created Basis is distributed to people who participate in the system. In that way, the system decentralizes monetary expansion, Al-Naji explains in the blog.

He’s hopeful that Basis can help solve the problem of currency instability, especially for the people in the developing world. The thought is that by providing anyone with an internet connection access to a stable and secure medium of exchange, Basis can “significantly increase the efficiency of the economies of developing nations.”