The President of the Federal Reserve Bank of St. Louis, James Bullard, expressed his views on the future of Bitcoin. He believes that cryptocurrency will not pose a threat to the US dollar. Bullard mentioned that various versions of dollars issued by banks before the Civil War were unpopular, and Bullard predicted that Bitcoin would suffer the same fate.
St. Louis Federal Reserve Chairman says Bitcoin’s popularity will not threaten the U.S. dollar
In an interview with CNBC last week, James Bullard said that the increasing interest in Bitcoin, coupled with the historically high price, will not pose a threat to the U.S. dollar as the world’s reserve currency. Bullard is an economist and has served as President of the St. Louis Federal Reserve Bank since 2008.
“I just think that for the Fed’s policy, it will be a visible dollar economy—you can see a real dollar global economy—and whether the price of gold is rising or falling, or whether the price of Bitcoin is rising or falling, and It won’t really affect this,” the St. Louis Fed chairman explained.
Bullard expressed concern about a wide range of financial transactions using different non-government-issued cryptocurrencies. “The U.S. dollar can already be traded electronically, so I’m not sure this is really the problem. This problem is a privately issued currency.” He asserted.
Then, he cited the time before the Civil War, describing how common banks issued their own currencies. He likened this situation to financial institutions, such as Bank of America, JPMorgan Chase and Wells Fargo, all of which have different dollar brands, explaining in detail:
They are all trading, trading each other at different discounts, and people don’t like it at all. I think the same thing will happen with Bitcoin here.
“You don’t want to use a non-uniform currency when you enter Starbucks. Maybe you will pay with Ethereum, maybe you will pay with Ripple, maybe you will pay with Bitcoin, maybe you will use a dollar. That’s not what we are going to do. The Civil War appeared. A unified currency.
Regarding whether Bitcoin or other cryptocurrencies pose a threat to the U.S. dollar, Brad emphasized that competition is nothing new and has existed for hundreds of years. “This is a currency competition. Investors want a safe haven. They want to maintain a stable value before investing in this currency.”
The governor of the Federal Reserve Bank of St. Louis continued to use the euro and the yen as examples of competing currencies. He emphasized: “None of these will replace the U.S. dollar.” He concluded:
It is very difficult for a real private currency like gold to play such a role, so I don’t think we will see any changes in the future.
At the same time, some analysts have a lower view of the dollar than Brad. Ruchir Sharma, chief global strategist at Morgan Stanley Investment Management, said last week, “Bitcoin has also begun to make progress in its ambition to replace the U.S. dollar as a medium of exchange.” In July last year, Goldman Sachs ( Goldman Sachs) warned that the U.S. dollar risks losing its status as a world reserve currency. In Russia, due to Russian President Vladimir Putin (Vladimir Putin) focused on the depreciation of the dollar, gold reserves have exceeded the dollar.
Do you think Bitcoin is a threat to the US dollar? Let us know in the comments section below.
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