US Fed Chairman Powell “Virtual currency is a speculative asset, too high volatility”

Input 2021.03.23 07:10

Jerome Powell, chairman of the Federal Reserve System of the United States (Fed), expressed a negative view on the 22nd (local time), saying that cryptocurrencies including bitcoin are close to speculative assets.

Chairman Powell said at a remote panel discussion held by the International Settlement Bank (BIS) on the subject of digital banking that day, “virtual currencies are very volatile, so they are not a useful value storage tool.” CNBC broadcast reported.

“It’s more like a speculative asset, which is basically a substitute for gold, rather than the dollar,” he added.
Bitcoin started to skyrocket from the end of last year, and recently broke the mark of $60,000 each. Some financial companies accept bitcoin as a means of trading or investment, and Tesla, a U.S. electric car company, bought bitcoin in large quantities, which triggered this surge.

However, government authorities in many countries, including the United States, are skeptical. As of 2 p.m. on the day when Chairman Powell’s remarks came out, Bitcoin is trading around $57,000, down 1% from 24 hours ago.

In addition, Chairman Powell predicted that the final model of the digital currency being developed by the Fed will be released in the next two years. Currently, the Federal Reserve Bank of Boston is working with the Massachusetts Institute of Technology (MIT) to research virtual digital currency.

“We need to get approval from Congress, the government and the wider public to do this,” said Powell. “We haven’t started working on this public participation yet.” He stressed that the novel coronavirus infection (Corona 19) pandemic highlights the need to develop better payment methods that can move funds more quickly.