James Pollard, president of the Federal Reserve Bank of St. Louis, doesn’t seem to understand why many are looking to cryptocurrencies as a medium of exchange rather than a common currency like the US dollar.
In an interview with Squawk Box on CNBC on Tuesday, Bullard said the issue of making payments is not currencies that can be traded electronically but rather issued currencies privately, as is the case for many cryptocurrencies. He referred to a time in the United States before the Civil War when there was confusion and aversion to trading “the equivalent of Bank of America dollars, JP Morgan dollars and Wells Fargo dollars”.
“I think the same will happen with Bitcoin here,” Pollard said. “You don’t want to go to a non-standard currency where you walk into Starbucks and maybe you will pay with Ethereum, maybe you will pay with Ripple, maybe you will pay with Bitcoin, maybe you will pay with a dollar – that’s not how we do this.
Squawk Fund (SquawkCNBC) February 16, 2021
The Chairman of the Federal Reserve referred to other currencies issued by the private sector globally that are required to adhere to the same restrictions as any currency issued by a central authority. He said that private currencies are not able to maintain a stable value against other commodities and currencies, and the future supply is not at all clear.
Bullard’s comments came as Bitcoin (BTC) reached a new all-time high of over $ 50,000 on Tuesday morning. Although the Fed chairman said describing crypto assets as competing for gold “might be a good way to think about” Bitcoin, he has largely kept his bullish remarks for the US dollar.
“The dollar economy will be as much as the eye can see and a global economy in dollars really as far as the eye sees it. Whether the price of gold goes up or down or the price of Bitcoin goes up or down does not really affect that.”