While addressing the U.S. House Committee on Financial Services earlier today, Federal Reserve Chair Jerome Powell said that the existing unbacked digital currencies are “vehicles for speculation”:
The existing digital currencies…are really vehicles for speculation. They are not used in payments, they are not a store of value, they are speculation (like gold). That’s what they’re used for.
During the hearing, Powell stressed that the Fed had not made a decision on issuing its own central bank digital currency (CBDC). However, the central bank is determined to “get to the bottom” of that issue in order to get a grasp of both technical and policy issues, indicating that there’s no rush to issue a digital dollar:
This will be something that we will invest a fair amount of time and expertise … to get it right.
Powell has made it clear that cryptocurrencies shouldn’t hamper the ability of law enforcement to track payments:
This is not something we should tolerate.
The Fed head compared the growth of cryptocurrencies to other technologies, such as railroads, telephones, and the internet, stressing the importance of developing a regulatory framework that will prevent malicious use cases of the likes of terrorism financing.
Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets, can be contacted at firstname.lastname@example.org.
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