Talking today on a heavyweight central bank panel, Jerome Powell, Chair of the U.S. Federal Reserve, insisted that the Fed’s current exploration of central bank digital currencies (CBDCs) was not motivated by cryptocurrencies and stablecoins.
“Crypto-assets are highly volatile (see Bitcoin) and therefore not really useful as a store of value and they’re not backed by anything. They’re more of an asset for speculation. So they’re also not particularly in use as a means of payment,” said Powell.
“It’s more a speculative asset that’s essentially a substitute for gold rather than for the dollar. And I think with crypto-assets, the public needs to understand the risks. The principal thing is there’s the volatility. There’s also the outsized energy requirement for mining, and the fact that they’re not backed by anything.”
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