The Federal Reserve Chairman believes that cryptocurrencies are “really vehicles for speculation” and “No one uses them for payments.” He then compared crypto to gold. His comments on cryptocurrency, Coinbase’s direct listing on Nasdaq followed.
Fed Chair Powell Thinks Crypto Is For Speculation
Federal Reserve Chairman Jerome Powell spoke about cryptocurrency on Wednesday in an interview with The Economic Club of New York. The event took place during Coinbase’s IPO through a direct listing on Nasdaq.
With the rising popularity of bitcoin and cryptocurrencies, he was asked if he was concerned about the impact they could have on the economy and the possibility for people to use them as payments. First, “We think of them more like crypto assets,” Powell said, adding:
What people call cryptocurrencies are actually vehicles for speculation. For example, no one uses them for payments like the dollar.
The Fed chairman went on to compare cryptocurrency with gold in terms of how it is being used for speculation. “For thousands of years, people have given gold a special value that it does not have,” he said. “Nevertheless, they have been doing that for thousands of years.” Note that bitcoin and cryptocurrencies are “much more like that,” Powell emphasized, “They are not really actively used as payment.”
Powell’s comments on cryptocurrency were consistent with the statements of new Treasury Secretary Janet Yellen. She said in February that bitcoin was a “highly speculative asset.” She also noted that it is “not widely used as a transmission mechanism” and is “an extremely inefficient way to execute transactions”.
In February, Powell said the digital dollar is “a very high priority project for us”. Last month, the Fed chairman said cryptocurrency “is essentially a substitute for gold, rather than the dollar.” He stressed, “the public must understand the risks. Most importantly, there is the volatility. There is also the excessive energy needs for mining, and the fact that they are not supported by anything. “
What do you think of what Fed Chair Powell said about cryptocurrency? Let us know in the comments below.
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