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Fed Chairman Powell believes that Bitcoin is not really useful as a value symbol, and there is no value behind it. It is more of a speculative asset, essentially a substitute for gold rather than the U.S. dollar.
Original title: “Powell: The Federal Reserve is not in a hurry to issue a digital dollar private cryptocurrency is more suitable for speculation”
Written by: Gao Xing, Fang Ling Source: Wall Street
As more and more institutions and investors embrace encrypted digital currencies, Fed Chairman Powell believes in his latest speech that the introduction of digital currencies is an important step for the financial system and requires careful preparation. There is no rush to launch them at present; Private cryptocurrencies represented by coins are more suitable for speculation.
On Monday, March 22, the Fed Chairman Powell Bank for International Settlements (BIS) said at a meeting that the USD’s CBDC will have a potentially huge impact all over the world, and the Fed will conduct extensive consultations before making a decision on this; the Fed does not need to be The first to launch a central bank digital currency. For the central bank, the central bank’s digital currency is good, but it also has great risks.
Jerome Powell, Chairman of the Federal Reserve
For the digital dollar, the Federal Reserve has an obligation to stay at the forefront to understand the relevant technical challenges, as well as the potential costs and benefits.
In addition, Powell also stated that due to the key role of the U.S. dollar as the world’s reserve currency, the Fed’s digital dollar is far more important than fast action, so it does not need to seize the first place in the digital dollar. He believes that the real key lies in whether the public wants it. Or whether a new digital form of central bank currency is needed.
For private cryptocurrencies represented by Bitcoin, Powell believes that they are more suitable for speculation and cannot be used as a substitute for the US dollar.
Unlike the current U.S. dollar, which is backed by the value of the Fed, private cryptocurrency is not really useful as a value symbol, and there is no value support behind it. It is more of a speculative asset, essentially a substitute for gold rather than the U.S. dollar, so in trading The application of aspects is not frequent.
As for the legal issues that digital currency may face, Powell said that it needs the support of Congress, the government and the general public, especially the approval of Congress. He believes that laws related to digital currencies are best presented as authorization laws rather than interpretations of existing laws.
Jens Weidmann (Jens Weidmann), the governor of the BIS who also attended the meeting on the same day, also expressed similar views as Powell. He believes that although the Federal Reserve and the European Central Bank are studying digital currencies, any possible introduction will take several years, and the digital dollar needs to be negotiated with legislators and may require legislation.
In addition, Agustín Carstens, President of the Bank for International Settlements (BIS), also pointed out that for Bitcoin, a key issue is that it “cannot collapse”, and it takes a lot of effort to achieve this.
On the day of Powell’s speech, although Bitcoin’s offer on Coinbase fell, it remained at around $57,000. In the last seven months, the price of the cryptocurrency has soared due to a surge in trading activities and an increase in acceptance by the financial industry.
It is worth noting that Yellen of the United States mentioned her views on Bitcoin in February this year. She also stated that Bitcoin is still a “highly speculative asset.”
In February of this year, Yellen stated that using Bitcoin for transactions is an “extremely inefficient way”, and the energy consumed by these transactions is amazing; Bitcoin is also a “highly speculative asset”, and digital currency may bring For a faster and cheaper payment experience, “but there are many issues that need to be studied, including consumer protection and anti-money laundering.”
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