The head of the U.S. Federal Reserve made a surprising statement on bitcoin

The head of the U.S. Federal Reserve, Jerome Powell, made a number of statements on the policy of the U.S. central bank he heads. Among them, he touched on the issue of bitcoin. According to him, bitcoin appears to be “a bigger substitute for gold than the United States dollar” from the point of view of some investors. In doing so, he made it clear that the precious metal was now facing competition from the oldest cryptocurrency.

Asked about bitcoin and digital assets in general, Powell stated:

“We call this phenomenon ‘crypto-assets.’ Crypto-assets are very volatile – just look at one of those assets, bitcoin. This is why bitcoin cannot be a real savings instrument, because it is not backed by anything. Such assets are speculative financial instruments.”

Recall that one of the former leaders of the U.S. Federal Reserve, Janet Yellen, who took over as head of the U.S. Treasury in the government of U.S. President Joe Biden, also previously criticized bitcoin.

Powell also touched on the topic of CBDC, which is favorably treated by the Bank for International Settlements (BIS). According to the head of the U.S. Federal Reserve, if such CBDC will be built on the basis of conventional money, especially on the basis of world reserve currencies, then such CBDC will be successful precisely because they will be based on already existing currencies. That is why such CBDC in themselves, according to Powell, will not be the basis of the global financial system in the future, but will only reflect the role played by conventional monetary means.

Speaking about the prospects for the digital dollar, Powell noted that “there is no need to rush into this issue, but the US Federal Reserve will continue to experiment with the concept of the digital dollar. Powell also stressed that the decision to launch a digital dollar, if made, would have to include regulatory approval of such a move by the U.S. Congress.