The Fed chairman believes that cryptocurrencies are a truly speculative tool and no one uses them for settlement. Then he compared cryptography to gold. His comments on the cryptocurrency followed Coinbase’s direct listing on Nasdaq.
Fed chairman Powell thinks crypto is speculation
Federal Reserve Chairman Jerome Powell discussed cryptocurrencies in an interview with the Economic Club of New York on Wednesday. The event took place as part of Coinbase’s IPO via a direct listing on Nasdaq.
With the growing popularity of bitcoin and cryptocurrencies, he was asked if he is concerned about the impact on the economy and people’s ability to use them as a means of payment. First: We see them more as crypto assets, Powell said, adding:
What people call cryptocurrencies are actually vehicles for speculation. Nobody uses it for payments like the dollar.
The Fed chairman compared cryptocurrencies to gold in terms of their use for speculation. For thousands of years, people have placed a special value on gold that it does not have, he said. Yet they have been doing it for millennia. Powell noted that bitcoin and cryptocurrencies are much more than that: They are not actively used as a means of payment.
Powell’s comments on cryptocurrencies mirror those of new Treasury Secretary Janet Yellen. In February, she said bitcoin was a highly speculative asset. It was also found that it was not widely used as a transfer mechanism and was a very inefficient way of conducting operations.
Powell said in February that the digital dollar is a very high priority project for us. Last month, the Fed chairman said cryptocurrencies are essentially replacing gold, not the dollar. He stressed: The public needs to understand the risks. Most importantly, there is volatility. Added to this is the excessive demand for energy for mining and the fact that it is not covered by anything.
What do you think of Fed Chairman Powell’s comments on cryptocurrencies? Let us know your comments in the section below.
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