The president of the Federal Reserve (Fed) of St. Louis of the United States, James Bullard, did not agree with the fact that there are so many cryptocurrencies in the ecosystem. His concern revolves around the fact that most of those that exist are worthless and therefore useless. However, he highlighted the usefulness of crypto assets such as bitcoin that facilitate transactions that are difficult to do with fiat money. In this regard, he said that these have a purpose and could circulate alongside the dollar.
In expressing his opinion on blockchains Bullard criticized the possibility that exists in the ecosystem of privately issuing money . “If you allow the issuance of private currency, you will have all kinds of them and that is exactly what has happened. Today there are a couple thousand of these and most of them have no value, “he said during an interview with the Yahoo Finance team.
Regarding the volatility of the bitcoin market, the official expects users to invest understanding the risks. In addition, he cataloged the world of cryptocurrencies as an interesting space and highlighted the fact that the Federal Reserve is also considering issuing a central bank digital currency (CBDC).
Any investment can go up, but it can also go down. So anyone building a portfolio has to balance risk and reward, as always in finance. So I think, for the most part, people want to go into this with their eyes wide open, they are certainly not blind to the idea that this is a volatile area, and I would just encourage everyone to be careful and take the risks on board when you are making any investment.
James Bullard, president of the St. Louis Fed.
It is not the first time that James Bullard shares his ideas on the pioneering cryptocurrency. Last February he pointed out that bitcoin is more of a rival to gold than the dollar . He added that the growing interest in bitcoin does not pose a serious threat to the US currency as a world reserve.
In addition, he questioned that the interest that grows around bitcoin is due to the fact that The population is using you to protect themselves against inflation or the deterioration of the global economy. From his perspective the global economy will continue to be ruled by the dollar «as far as the eye can see and if the price of gold rises or falls, or the price of bitcoin rises or falls. low, it won’t really affect that. ”
Bitcoin in the US Fed Speech
Interestingly, the word bitcoin has been used frequently among officials of the United States central bank and other government agencies. They all agree when they point out that the cryptocurrency does not represent any competition for the dollar, but rather it is for gold.
In fact, last month Anders Brownworth, architect of payment systems of the Bank of the Fed of Boston said that the prototype of CBDC or digital dollar in which they work, will have its similarities with bitcoin, but will also keep its distances , as CriptoNoticias reported.
On the other hand, the Fed has also pointed out that stablecoins represent an “improvement” because they are backed by national currencies such as the US dollar, which, in theory, gives them “credibility”.
Recently, Lael Brainard, governor of the United States Federal Reserve, in relation to the CBDC that plans to issue The nation said it will reduce risks for users and help stabilize the financial system.
However, the mis The organization’s president, Jerome Powell, admitted the possible influence of its money printing policies on the markets . This with respect to the economic aid campaigns (bonds distributed among part of the population), coming from a greater printing of money by the Federal Reserve.
In any case, to the US Federal Reserve officials would like to see higher inflation before evaluating the possibility of tightening monetary policy. While all this is happening there are those who believe that bitcoin will continue to gain prominence against the dollar as a store of value.
