Dudley: Fed is starting to think about its own digital currency

Crypto is going to backfire

Instead of creating a new, decentralized currency, the blockchain will allow governments to track and tax every dollar transaction automatically.

On Bitcoin, Dudley said it is no rival for dollar, and "it's really more of a speculative activity."

More broadly, he said that financial markets are 'pretty buoyant', which isn't concerning. He said he's surprised markets are unconcerned about fiscal sustainability.