Jerome Powell says cryptos are highly volatile and therefore not really useful stores of value.
Jerome Powell, leader of the world’s most powerful central bank,
recently disclosed that crypto is unreliable for wealth preservation, and the
apex bank was in no hurry to introduce a competitor.
“They’re highly volatile and therefore not really useful stores of
value and they’re not backed by anything,” The Fed Chief said during
a virtual panel discussion on crypto banking hosted by the Bank for
International Settlements. “It’s more a speculative asset
that’s essentially a substitute for gold rather than for the dollar.”
Recall
about a month ago, Janet Yellen the U.S
Treasury Secretary and custodian of the world’s biggest economy, raised
concerns that the world’s most popular crypto asset could be ideal for money
laundering and illicit transactions.
“I don’t think that bitcoin … is widely used as a transaction
mechanism,” Yellen told Andrew Ross Sorkin at a DealBook
conference. “To the extent, it is used I fear it’s often for illicit finance.
It’s an extremely inefficient way of conducting transactions, and the amount of
energy that’s consumed in processing those transactions is staggering.”
In
addition, Yellen raised concerns about its usual high price swings that often
come to cost some investors their fortune.
“It is a highly speculative asset and you know I think people should be aware it can be extremely volatile and I do worry about potential losses that investors can suffer,” Yellen said.
In a
report credited to CNBC, the highly revered
monetary policymaker, Powell, spoke on why the U.S Federal Reserve Bank was in
no rush to start its central bank digital currency.
“To move forward on this, we would need buy-in from Congress, from
the administration, from broad elements of the public, and we haven’t really
begun the job of that public engagement,” Powell said.
“So you can expect us to move with great care and transparency with regard to
developing a central bank digital currency.”
The U.S Fed Chief also gave credence to the fact that the U.S Congress likely would have to pass some type of authorization before the Fed could proceed with its own currency.
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