The Federal Reserve Bank of Dallas president says bitcoin is clearly â€œa store of value.â€ Emphasizing the differences between cryptocurrencies, like bitcoin, and central bank digital currencies, he said the latter â€œwonâ€™t necessarily be a store of value.â€
Fed Bank Chief Calls Bitcoin a Store of Value
The president of the Federal Reserve Bank of Dallas, Robert Kaplan, talked about bitcoin and central bank digital currencies (CBDCs) Friday at the Texas A&M Bitcoin Conference 2021 hosted by Mays Business School.
Firstly, Kaplan explained that he would distinguish between bitcoin and central bank digital currencies. â€œI would differentiate between a cryptocurrency, like bitcoin, and the discussions that are being had about digital currency,â€ such as the digital yuan experiment in China, he described.
He proceeded to explain that the challenge on bitcoin is â€œhow widely it will be adopted.â€ The Federal Reserve Bank of Dallas chief elaborated:
â€œIt obviously moves a lot in value,â€ he continued. â€œThat may keep it from spreading too far as a medium of exchange and wide adoption but that can change and that will evolve.â€
The Fed bank chief also confirmed that he and his team â€œhave studied intensely and will keep studying bitcoin and other cryptocurrencies.â€
He then talked about central bank digital currencies, emphasizing:
â€œIf youâ€™re worried about the value of underlying currency, digital currency is likely to be, for example in China, tied to the value of the underlying,â€ he detailed, adding that itâ€™s also â€œa way of ease of payment, domestic payments first, getting money to where itâ€™s needed.â€
Kaplan further opined: â€œIn some cases, you could argue in China itâ€™s a way to monitor flows â€¦ and then ultimately how far will this go, and thereâ€™s been speculation about global payments and the implications.â€
As for the digital dollar, Federal Reserve Chairman Jerome Powell said in February that the Fed is actively studying the possibility of issuing a digital dollar. He emphasized that it is a â€œvery high priority projectâ€ for the Fed. Meanwhile, the Federal Reserve Bank of Boston and the Massachusetts Institute of Technology (MIT) plan to unveil at least two prototypes of a digital dollar in the third quarter of this year.
What do you think about what the Dallas Fed president said about bitcoin? Let us know in the comments section below.
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