Chairman of the Federal Reserve, Jerome Powell, spoke highly of an Ethereum fork to help facilitate the benchmark for global interest rates.

Key Takeaways
Jerome Powell believes the Ethereum-based LIBOR alternative is a reliable solution for banks.
LIBOR is being phased out, making room for a new index to become the world standard to measure the cost of borrowing funds for financial institutions.
AMERIBOR’s Ethereum fork is compatible with the original Ethereum blockchain, opening the door to it migrating to the public blockchain.

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One of the most important metrics in the world of finance, LIBOR, is being phased out due to banks supplying false data. One potential replacement, an Ethereum fork, would bridge blockchain technology and traditional finance.
Finance World to Retire LIBOR
Last week, Fed Chairman Jerome Powell was asked what he thought of the AMERIBOR index, an Ethereum-based LIBOR competitor developed by the American Financial Exchange (AFX).
Powell responded that it was a cohesive metric that reflects the accurate cost of funding for banks, but may not be appropriate for adoption by all financial institutions.
The LIBOR, the London Interbank Offer Rate, is an important metric that measures the average cost of funding for the top banks in the world. This helps to set a benchmark rate for corporate loans, student debt, and other credit instruments.

Each bank reports the rate at which they borrow money for various time periods, and the average of each bank’s answer is the definitive LIBOR.
The LIBOR index used data from between 10-20 banks for each currency calculation. 
3-Month LIBOR, based on U.S. dollar. Courtesy of Federal Reserve Bank of St. Louis.However, banks have understated the rates at which they have been borrowing funds, thereby deceiving the market. LIBOR’s credibility has suffered a great deal due to this practice. 
In 2019, the United Kingdom’s securities regulator announced that LIBOR will be phased out of existence in 2021.

The Race for a Blockchain-based Replacement
Two potential replacements have emerged since the regulator made the announcement last year.
The Federal Reserve established the Secured Overnight Funding Rate (SOFR) as a means of developing a benchmark rate to replace the LIBOR. The SOFR only captures data from the overnight repo market, however.
Alternatively, AMERIBOR, an Ethereum fork, gathers funding rates from various time periods from 1,000 American banks and financial institutions.
This means tokens on the AFX blockchain can be easily migrated to the main Ethereum blockchain, bridging legacy and crypto finance on a single database. Adopting such a bridge would be a historic achievement for the blockchain community as well as Ethereum enthusiasts.

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