Crypto Currency News

The Federal Reserve backs Bitcoin as an alternative to gold, but not the US dollar

The body's chairman, Jerome Powell, noted that BTC "lacks the ingredients" of a fiat currency.

Jerome Powell, president of the United States Federal Reserve (Fed), made a series of appreciations regarding Bitcoin (BTC) and spoke of the possibility of issuing a digital dollar in the future.

In recent months, the growth in the price of BTC was mainly due to its institutional and retail adoption as a store of value, that is, as savings. However, the leaders of the crypto ecosystem aspire for the leading crypto currency to achieve global adoption that turns it into an everyday payment method. In that regard, Powell commented:

“Bitcoin is essentially a substitute for gold instead of the dollar”

The US official explained that BTC “lacks key ingredients that would make it a useful currency,” so he does not see its inclusion in the financial system as a means of payment viable, to exchange for goods and services.

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On the other hand, Powell singled out stable coins as a “superior” digital asset, emphasizing that it owes its credibility to the backing of the dollar. In a webinar organized by the Bank for International Settlements, he took the opportunity to slip that it is necessary to start developing regulatory frameworks for new financial tools.

“Stable coins may have a role to play with proper regulation, but that role will not be to form the basis of a new global monetary system,” Powell added.

Regarding the possibility of developing a digital dollar, the Fed president explained that a prior and careful “review” by the government and the general public is necessary to determine its acceptance and its applications.

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