FED’s Cryptocurrency Comment: Bitcoin Could Be a ‘Threat’ for Dollar in the Future

In an interview with CNBC on May 14, one of the top decision-makers in the US, The Louis Federal Reserve Bank made positive comments on Bitcoin and even so stressed that it may be a potential “threat” to the US dollar.

James Bullard, president of Louis Federal Bank, who interviewed CNBC on the sidelines of the Consensus 2018 conference in New York on Monday, praised the positive aspects of cryptographic currencies as a whole and especially hoped that these units would reduce trade costs. Bullard said that the currencies are “facilitating trade that would not otherwise occur. Some of that’s illegal, but some of that is avoiding costs that would otherwise be there.”

The dollar has been the winner historically

As to whether Bitcoin is a potential threat to the US dollar, Bullard said he was not sure whether the leading cryptographic currency would create a potential competitive environment. He said;  “I don’t think so at this point […]. We don’t know how the future’s going to unfold.” and he added while continuing to talk about the supremacy of the dollar;  “My idea is that there’s a lot of currency competition going on right now. “The dollar has been the winner historically because it’s backed by the largest economy and a relatively stable policy in terms of low inflation and that’s going to be tough to beat. But a lot of people here want to beat it.”

As for Blockchain, Bullard has more explicitly commented on optimism:

“We think blockchain technology is very interesting [..] we want to be very engaged and thoughtful as this proceeds.”

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Is Fed considering to issue its own cryptographic currency?

To the question whether the Fed is considering to issue its own cryptographic currency, he said that they can certainly look into this possibility. In addition to that, there are different teams in the Fed’s field that examine all aspects of blockchain technology.

The Reserve Bank published a study in January of this year which is titled ” A Short Introduction to the World of Cryptocurrencies”, in which Bitcoin and its altcoins are predicted to “emerge as their own asset class.”

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