St Louis Fed Chief: USD Still Hard to Beat but BTC Might One Day Threaten It

Avi Rosten
  • The president of the St. Louis Federal Reserve Bank was cautious about the future of BTC, but sees potential
  • Claiming that the Fed is "very interested" in blockchain, the top policy official seemed to suggest a warmer attitude towards the space

St. Louis Fed president James Bullard yesterday had a generally positive outlook on bitcoin - indicating that while for now USD is king, the cryptocurrency could one day have the potential to threaten fiat in some way.

Taking to CNBC at the Conensus Conference in New York on Monday, the top US policy maker - whose attendance alone is significant for the industry - had some interesting thoughts on cryptocurrency and its relationship with the traditional financial world.

Explaining that the federal reserve think that blockchain technology is “very interesting,” Mr. Bullard, when asked whether he says bitcoin as a threat to the US dollar - responded:

“I don’t think so at this point….We don’t know how the future’s going to unfold. My idea is that there’s a lot of currency competition going on right now.…The dollar has been the winner historically because it’s backed by the largest economy and a relatively stable policy in terms of low inflation and that’s going to be tough to beat. But a lot of people here want to beat it.”

James Bullard

The Fed chief also responded to rumours concerning whether the reserve bank intends to launch its own cryptocurrency, replying that they have “no plan at this point,” but that they are looking into potential applications of blockchain technology.

Positive atmosphere

These latest remarks reaffirm previous positive moves towards embracing the crypto world - with the reserve bank recently publishing several papers specifically addressing cryptocurrencies.

Other jurisdictions have been leading the way in the last few weeks - with Poland yesterday becoming the first country to publish banking records on the blockchain.

While these latest comments are undoubtedly cautious, crypto investors will hope these developments suggest that regulatory bodies and governments are warming to the industry.

Featured Image Credit: "Federal Reserve Bank" by "Chris Yunker" via Flickr; licensed under "CC BY 2.0"