Fed Chairman Powell Talked About Cryptocurrencies

The Federal Reserve is a powerful organization and it is not surprising that investors, analysts, and others are closely monitoring the situation to learn more about its decisions. On Monday, the Federal Reserve Chairman spoke at a virtual panel discussion on digital banking hosted by the Bank for International Settlement. According to Fed Chairman Jerome Powell, cryptocurrencies remain an unstable store of value. Moreover, the country’s central bank is not going to introduce a competitor in the nearest future.

According to Fer Chairman Powell, they are highly volatile and therefore not really useful stores of value. Furthermore, they are not backed by anything. He also noted that it is a more speculative asset that’s essentially a substitute for gold rather than the dollar.

As a reminder, Jerome Powell spoke on a day when bitcoin was down on Coinbase. Despite this fact, it was still trading near $57,000 apiece. People should keep in mind that its price soared over the past seven months amid a flurry in trading activity. Moreover, growing acceptance in the financial industry played an important role.

Cryptocurrencies and the central bank

As mentioned earlier, the Federal Reserve is a powerful organization. Interestingly, for the past several years, the country’s central bank worked on its own payments system. As a reminder, the purpose of this system is to make it more convenient to transfer money, with the unveiling of the final product likely to happen over the next two years.

Interestingly, the central bank also conducted other inquiries into whether a central bank digital coin would be necessary or practical. According to Fed Chairman, the central bank is taking its time before moving into anything. The Federal Reserve understands the importance of this topic. It is better to explore these issues more carefully, and it will take time to deal with all challenges.

In 2020, the Boston Fed partnered with the Massachusetts Institute of Technology to explore this issue. Thanks to this agreement, it will be easier to learn more about a central bank-sponsored cryptocurrency.

It is hard to imagine the modern world without cryptocurrencies such as bitcoin, ethereum, and others. There is no need to ban cryptocurrencies. Moreover, it is important to reduce the number of crypto-related crimes.

Authorities should work with companies and enthusiasts to find the best solution. Thanks to the internet, it is quite easy to learn about various cryptocurrencies.