“Cryptocurrency volatility is very large
It’s not a useful store of value”
Written response to the testimony of Congress on the 23rd
“The economic recovery is faster than expected,
Poor employment… Will continue to apply”
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Jerome Powell (pictured), chairman of the Federal Reserve System (Fed), said that cryptocurrencies such as bitcoin are highly volatile speculative assets. It also reaffirmed its position not to rush on the digital dollar.
According to CNBC, a US economic broadcaster on the 22nd (local time), Chairman Powell said at a remote panel discussion held by the International Settlement Bank (BIS) on the subject of digital banking, “cryptocurrencies are very volatile, so they are not a useful means of storing value.” “Cryptocurrency doesn’t guarantee anything,” he pointed out. “Cryptocurrency is essentially a speculative asset that replaces gold rather than dollar.”
Chairman Powell’s remarks came from a situation where bitcoins are trading at around 57,000 dollars (about 64 million won) each. The level of speech was also the highest in recent years. Finance Minister Janet Yellen said, “Bitcoin is speculative and very inefficient,” and the Fed also started to check bitcoin.
Chairman Powell also expressed a cautious view on the introduction of the digital dollar. “The novel coronavirus infection (Corona 19) has highlighted the need to develop a better payment method,” he said. “To proceed with this (digital dollar), it needs to be approved by Congress, the government and the wider public.” With the rapid growth of cryptocurrencies, including bitcoin, countries including China are accelerating the launch of digital currency, but it is accepted as a means to examine the effects meticulously rather than incubating. The Fed believes that Congress should create laws before issuing digital dollars. Last year, the Federal Reserve Bank of Boston entered into a partnership with Massachusetts Institute of Technology (MIT) to develop digital currency. In this regard, CNBC predicted that “the final model related to the digital dollar will be released after two years.”
Separately, Chairman Powell said in a written response prepared before parliamentary testimony on the 23rd, “the US economy has recovered faster than expected,” and “there is a long way to go to a complete economic recovery.” He added, “In particular, the unemployment rate is underestimated.” Based on this analysis, Chairman Powell stressed that he would continue to support economic activities. This is a recapitulation of the previous position, and the market is drawing attention on what additional comments will be made on inflation and interest rate hikes on the 23rd.
/New York = Correspondent Kim Young-pil [email protected]
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