Although Bitcoin (BTC) is too volatile to be monetary and “unsecured”, it could be an “alternative to gold,” said the chairman of the US Federal Reserve.
At an event hosted by the Bank for International Settlements (BIS) on Monday, Jerome Powell made honest comments in response to a question about cryptocurrency.
Powell maintains bitcoin
When asked if he believes that Bitcoin and other cryptocurrencies pose a threat to financial stability, Powell put forward well-known arguments that have always come from old economic figures.
He said: “Crypto-assets – we call them ‘crypto-assets’ – are very volatile – see Bitcoin – so they are not very useful as a value store and are not supported by anything.
“It is a speculative asset, so it is not used specifically as a payment method. It is a speculative resource. In fact, it is an alternative to gold instead of dollars. ”
Powell’s words provide some of the Fed’s most direct views on bitcoin, which will be released to the public in recent times, based on the outlook presented in 2019. It also came a few weeks after the new finance minister Janet Yellen clarified concerns about decentralized cryptocurrencies.
As with Yellen, Powell seems to have triggered a wave of negative sentiment in the market as BTC / USD fell by almost $ 1,000 after his response.
Despite all the controversy, however, the biggest proponents of Powell and Bitcoin agree to position cryptocurrency as a new form of gold.
The verdict could seriously damage the gold bugs that are hostile to Bitcoin, especially Peter Schiff, who continues to argue that fate is on his side when it comes to generation-focused stores.
Fiat means “public interest”
Together with the general manager of the Bank for International Settlements, Augustin Carstens and Jens Weidmann, president of the German central bank, Powell also looked at stack coins as they are linked to the ongoing trend with the central bank’s digital currencies, CBDC.
Here, the conversation was less eccentric, as speakers echoed familiar situations involving the separation of private stack coins and cryptocurrencies from digital currencies managed by the bank.
“To the extent that a stable currency is supported by the sovereign currencies of the leading countries, it definitely improves cryptocurrencies,” Powell said.
“But where does this trust come from? It comes from the sovereign currency, which is the backbone. ”
He said fiat currencies were “issued with a public interest” in mind, assuring that stable currencies would not serve as a basis for a global financial system in the future.