The Chairman of the Federal Reserve, Jerome Powell, downplayed the threat of bitcoin someday replacing the U.S. dollar and becoming a “currency for the world” on Monday.
Speaking at a webinar sponsored by the Bank of International Settlements Powell said, “Crypto assets are highly volatile, see Bitcoin, and therefore not really useful as a store of value. They’re not backed by anything. They’re more of an asset for speculation.”
He then added, “it [bitcoin] is essentially a substitute for gold rather than the dollar.”
Meanwhile, the Fed hardly seems to be in any rush to develop a digital dollar.
Powell stated that he would prefer to see Congress pass laws authorizing the digital currency, rather than the Fed use its current authority. He also insisted that a lot of careful review and acceptance by the American public would be needed.
“Because we’re the world’s principle reserve currency, we don’t need to rush this project, we don’t need to be first to market,” he said.
China meanwhile is aggressively pursuing a move into the digital currency space. It recently experimented with the debut of digital wallets, containing digital yuans, in some regions of the country.
Gold was under some pressure in Monday trading. Gold for April delivery (GCJ21) traded $3.80, or 0.22%, at $1737.90 per ounce.
The U.S. dollar traded lower as well. Off a little more than a tenth of a percent on the U.S. dollar index (DXY) at 91,79.
Bitcoin is off its recent high of $60,000 per coin, but nonetheless traded near its high at $55,725.00 per bitcoin.