Fed chair Jerome Powell: Bitcoin could replace gold, but not the US dollar

The head of the Federal Reserve (Fed), Jerome Powell, questioned Bitcoin’s suitability as a store of value and as a means of payment.

During remarks at the BIS virtual summit, Powell noted the high volatility of digital assets, which purportedly render them useless as stores of value.

“They are not backed by anything and are used more for speculation, so not particularly popular as a means of payment. Crypto assets are more likely to replace gold than the dollar,” Powell said.

In October 2020, the head of the Fed said that for the United States it is more important to correctly issue a central bank digital currency (CBDC) than to be first in the world.

In January 2021, Powell cited the regulation of stablecoins as more important than issuing a digital US dollar. According to him, American authorities do not seek to be the first in the world to issue a CBDC, because they have already pioneered by creating the world’s reserve currency.

In March, Powell noted that the digital dollar will not replace fiat money, but will coexist with them.

Earlier, Fed staff and MIT were to complete work on a CBDC prototype by July 2021.

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