The president of the Federal Reserve Bank of Dallas says bitcoin is clearly “ a store of value. ” He highlighted the differences between cryptocurrencies, such as bitcoin, and central bank digital currencies, saying the latter “is not necessarily a store of value.”
Fed Bank Chief calls Bitcoin a store of value
Federal Reserve Bank of Dallas President Robert Kaplan spoke on Friday about bitcoin and central bank digital currencies (CBDCs) at the Texas A&M Bitcoin Conference 2021 hosted by Mays Business School.
First, Kaplan explained that he would differentiate between bitcoin and central bank digital currency. “I would differentiate between a cryptocurrency, such as bitcoin, and the discussions that are going on about digital currencies,” such as the digital yuan experiment in China, he described.
He went on to explain that the challenge for bitcoin is “how widely it will be adopted.” The Federal Reserve Bank of Dallas chief explained:
At this point it is clear that it is a store of value.
“It clearly moves a lot in value,” he continued. “That may keep it from spreading too far as a medium of exchange and widespread adoption, but that can change and it will evolve.”
The Fed bank chief also confirmed that he and his team have “studied intensively and will continue to study bitcoin and other cryptocurrencies.”
Then he spoke about central bank digital currencies and emphasized:
The discussions around the world about digital currencies are somewhat different in the sense that a digital currency is not necessarily a store of value.
“If you are concerned about the value of the underlying currency, the digital currency, for example in China, is likely linked to the value of the underlying currency,” he added, adding that it is also “a means of payment convenience. , domestic payments first, to get money where it is needed. “
Kaplan went on to say, “In some cases, you could argue in China that it’s a way to track flows … and then ultimately how far this goes, and there has been speculation about global payments and their implications.”
As for the digital dollar, Jerome Powell, chairman of the Federal Reserve, said in February that the Fed is actively studying the possibility of issuing a digital dollar. He stressed that it is a “very high priority project” for the Fed. Meanwhile, the Federal Reserve Bank of Boston and the Massachusetts Institute of Technology (MIT) plan to unveil at least two digital dollar prototypes in the third quarter of this year.
What do you think about what the president of the Dallas Fed said about bitcoin? Let us know in the comments below.
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