Fed’s Bullard says Cryptocurrencies Operates as Non-uniform Currencies
The growth of Bitcoin and other digital currencies is working against the need to create a market-based trading system that offers consistent prices, said James Bullard, director of the Federal Reserve Bank of St. Louis.
Speaking at the 2018 Consensus event in New York on Monday, Bullard said Cryptocurrencies aren’t getting any special treatment he further explained that cryptocurrencies have begun to operate as non-uniform currencies, as there are more than 1,800 cryptocurrencies, many of which trade at different prices at the same time in the same local markets.
The U.S. dollar is among the biggest competitors that cryptocurrency faces an uphill battle in dethroning, Bullard said.
“Cryptocurrencies may be unwittingly pushing in the wrong direction in trying to solve an important social problem, which is how best to facilitate market-based exchange,” Bullard said. The dollar, on the other hand, is backed by a stable government with direct and sensical monetary policy and persistently low inflation — because of that, it can better achieve the goals and meet the needs of the market.
But while Bullard highlighted disadvantages of cryptocurrencies, he acknowledged the promise of blockchain and related technologies that support cryptocurrencies, though he said he has not seen “any technological solution that will make everybody perfectly happy.”
In a moderated question-and-answer session after his speech, Bullard reiterated that the U.S. dollar will remain the dominant currency in the world because it comes from the world’s biggest economy, is easily tradable and is backed by the Fed, the most powerful central bank.
Bullard said it’s not likely at this point that the Fed will introduce its own digital currency, as some have suggested. He expressed confidence that the dollar is not threatened by cryptos, though his presence at the conference suggested the central bank is watching developments.
Get Bitzamp Latest Update By Downloading our Mobile App: Bitzamp – Cryptocurrency News – Apps on Google Play
Join Us On Telegram