The Federal Reserve Bank of Dallas president says bitcoin is clearly “a store of value.” Emphasizing the distinctions in between cryptocurrencies, like bitcoin, and reserve bank digital currencies, he stated the latter “won’t always be a store of value.”
Fed Bank Chief Calls Bitcoin a Store of Value
The president of the Federal Reserve Bank of Dallas, Robert Kaplan, discussed bitcoin and reserve bank digital currencies (CBDCs) Friday at the Texas A&M Bitcoin Conference 2021 hosted by Mays Business School.
Firstly, Kaplan described that he would compare bitcoin and reserve bank digital currencies. “I would distinguish in between a cryptocurrency, like bitcoin, and the conversations that are being had about digital currency,” such as the digital yuan experiment in China, he explained.
He continued to discuss that the difficulty on bitcoin is “how commonly it will be embraced.” The Federal Reserve Bank of Dallas primary elaborated:
Right now, it’s clear it’s a store of value.
“It undoubtedly relocations a lot in value,” he continued. “That might keep it from spreading out too far as a medium of exchange and large adoption however that can alter which will progress.”
The Fed bank chief also verified that he and his group “have actually studied extremely and will keep studying bitcoin and other cryptocurrencies.”
He then discussed reserve bank digital currencies, stressing:
The conversations worldwide on digital currency are a little various because a digital currency won’t always be a store of value.
“If you’re anxious about the value of hidden currency, digital currency is most likely to be, for instance in China, connected to the value of the underlying,” he detailed, including that it’s also “a method of ease of payment, domestic payments initially, getting cash to where it’s required.”
Kaplan even more believed: “In some cases, you might argue in China it’s a method to keep track of circulations … and after that eventually how far will this go, and there’s been speculation about worldwide payments and the ramifications.”
As for the digital dollar, Federal Reserve Chairman Jerome Powell stated in February that the Fed is actively studying the possibility of releasing a digital dollar. He highlighted that it is a “extremely high concern task” for the Fed. Meanwhile, the Federal Reserve Bank of Boston and the Massachusetts Institute of Technology (MIT) strategy to reveal a minimum of 2 models of a digital dollar in the 3rd quarter of this year.
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