Federal Reserve Chairman Jerome Powell will hold a press conference following the two-day Federal Open Market Committee Meeting in Washington, July 31, 2019.
Sarah Silbiger | Reuters
Federal Reserve Chairman Jerome Powell said Monday that cryptocurrencies remain an unstable source of value and that the central bank is in no hurry to introduce competitiveness.
“They are highly volatile and therefore not a valuable source of value and are not supported by anything,” Powell said in a substantive panel discussion on digital banking hosted by the Bank for International Settlements. “It is more of a speculative asset that largely replaces gold than a dollar.”
Powell spoke of a day when bitcoin was down on Coinbase but still trading near $ 57,000 apiece. The cryptocurrency has risen in price over the past seven months amid a shift in trading activity and a growing acceptance of the trading industry.
For the past several years, the Fed has been working on its own payment system that will enable faster cash transfers, with the announcement of the final result likely to occur over the next two years.
In addition, the Federal Reserve has also conducted further investigations into the need for a central or practical digital bank base.
On the latter issue, Powell said the Fed is taking its time before moving into anything.
“To move forward with this, we have had to buy in from Congress, from the administration, from broad elements of the public, and we have not started the work of that public consultation,” he said. expect us to move with great care and transparency in the development of central bank digital currency. “
The Boston Fed last year entered into a partnership with the Massachusetts Institute of Technology on a multi-year study on the development of central bank digital currency. The work is expected to take two to three years and even then will focus more on the idea of a cryptocurrency backed by a central bank than on its implementation.
Powell said Congress had to go through some sort of enabling legislation before the Fed could go ahead with its own money.
He noted, however, that the Covid-19 pandemic has focused on developing better payment systems so that money can be obtained quickly for those in need.
“He highlighted across a wide range of things the different impacts that so many have on poor and low- and middle-income communities,” Powell said.