The St. Louis Fed president, James Bullard highlighted the positive sides of Bitcoin. He says the cryptocurrency is not a potential threat to the U.S dollar in a recent interview.
Bullard identified one of the positive aspects of Bitcoin as its ability to reduce costs. He explained that cryptocurrency is “facilitating a trade that would not otherwise occur. Some of that’s illegal, but some of that is avoiding costs that would otherwise be there.”
Bullard added that the dollar is the winner historically since it is backed by the largest economy. He noted that the dollar has a stable policy in terms of low inflation and that it will be hard to beat.
The president commented briefly on the technology behind cryptocurrencies. He said, “we think blockchain technology is very interesting [..] we want to be very engaged and thoughtful as this proceeds.”
Will The St. Louis Fed Have Its Own Cryptocurrency?
The top U.S policy maker responded to a question of whether or not the Fed would have its own cryptocurrency. He stated “we can certainly look at that as a possibility,” however, he said there were no such plans presently.
The Fed explores blockchain technology continually and looks for new ways it can be applied to solve problems. The comments from the St. Louis Fed since January have been positive and is supportive of the crypto community.
The Federal Reserve Bank published a paper that favorably assesses digital currencies and blockchain application for future use. The paper concludes by forecasting that Bitcoin and altcoins would eventually become an asset class of its own.