St. Louis central bank president: people don’t want a ‚disparate currency‘ like Bitcoin
„There will be a dollar economy as far as the eye can see,“ says James Bullard.
James Bullard, the president of the Central Bank of St. Louis, doesn’t understand why many people are turning to cryptocurrencies as a medium of exchange instead of a single currency like the US dollar.
In an interview on CNBC’s Squawk Box on Tuesday, Bullard said the problem for payments is not currencies that can be traded electronically, but rather privately issued ones, as is the case with many cryptocurrencies. He spoke about a time in the United States before the Civil War when there was Profit Secret confusion and reluctance to trade the „equivalent of Bank of America dollars and JPMorgan dollars and Wells Fargo dollars“.
„I think the same thing would happen here with Bitcoin,“ Bullard said. „You shouldn’t go to a disparate form of currency where you might pay at Starbucks with Ethereum, you might pay with Ripple, you might pay with Bitcoin, you might pay with a dollar. It doesn’t work that way.“
Currencies cannot maintain a stable value against commodities
„You don’t want to go to a non-uniform with currency,“ says the Fed’s Bullard on $BTC: pic.twitter.com/QfLgP64ST9
– Squawk Box (@SquawkCNBC) February 16, 2021
The central bank governor pointed to other privately issued currencies around the world that must abide by the same restrictions as any currency issued by a central authority. He said private currencies cannot maintain a stable value against commodities and other currencies. He also said their future supply was „not at all clear“.
Shortly before, Bitcoin (BTC) hit a new all-time high of over US$50,000. Although the central bank governor said that characterising the crypto-asset as a rival to gold could be „a good way to look at“ Bitcoin, he was largely optimistic only about the US dollar.
„There will be a dollar economy as far as the eye can see. There will also be a dollar economy globally, really as far as the eye can see. Whether the gold price goes up or down or the bitcoin price goes up or down doesn’t really affect that.“