Fed Chairman Powell: Bitcoin could “substitute for gold rather than for the dollar”

Fed Chairman Jerome Powell recently reiterated his views on Bitcoin as an alternative to gold, but the market seems to have yet to respond immediately to the powerful man’s statement.

Even though Bitcoin (BTC) is too volatile to be money and “not backed by anything”, it could still be a “substitute for gold,” said the chairman of the United States Federal Reserve. States said.

Speaking at an event hosted by the Bank for International Settlements (BIS), on Monday, Jerome Powell made blunt comments to answer a question about cryptocurrencies.

Powell is still not fully supportive of Bitcoin

Asked if he thinks Bitcoin and other cryptocurrencies pose a threat to financial stability, Powell made familiar arguments long since stemming from the metrics. Traditional finance.

“Cryptocurrencies are very volatile – like Bitcoin – and therefore cannot really be seen as a store of value and they are not backed by anything,” he said.

“They are like an asset for speculation, so they cannot be used as a means of payment. It’s more like a speculative asset. Essentially, Bitcoin can be used as a substitute for gold, not the dollar. “

Powell’s words are also the Fed’s most direct opinion on Bitcoin in recent times, and built on a stance launched in 2019. They also come weeks after the new finance minister. Janet Yellen made clear her doubts about decentralized cryptocurrencies.

However, despite all the disagreements among government officials, both Powell and Bitcoin’s biggest supporters agree on the future of cryptocurrencies as an asset class similar to gold.

The verdict could hit Bitcoin hostile gold investors, especially Peter Schiff, who goes on to argue that fate is on his side when it comes to generation stores of value.

Legal currency for “community interests”

Along with BIS general manager Augustin Carstens and Jens Weidmann, chairman of the Federal Bank of Germany, Powell also mentioned stablecoins in the central bank’s blossoming trend of digital currencies, CBDC.

Here, the talk on the subject has been less confusing, with the speakers repeating the nothing new stances regarding the separation of private stablecoins and bank-run CBDCs. Powell emphasized:

“To the extent that a stablecoin is backed by the sovereign currencies of nations, it is certainly an improvement over crypto assets.”

“But anyway, what makes us believe in such coins? It comes from the sovereign currency of a country as the fulcrum. ”

The fiat currency is “issued with the benefit of the community,” he said, emphasizing that stablecoins will not serve as the basis for the global financial system in the future.

CHK aggregated

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