The president of the Federal Reserve of the United States, Jerome Powell, spoke harshly about cryptocurrencies during an appearance before Congress.
Speaking to the House Financial Services Committee, the head of the US central bank said at Wednesday's hearing that cryptocurrencies have no "intrinsic value" and present serious risks to investors, as reported by CNBC.
Part of their concerns seem to come from the apparent crypto bubble. Powell said that "relatively unsophisticated investors see that the asset goes up in price, and they think: this is great, I will buy this . In fact, there is no promise of that. "
Powell added :
"It's not really a coin. We are not seeing this as something we should be doing ... Mainly I have concerns. If you think about what currencies do, they are supposed to be a means of payment and a store of value, basically, and cryptocurrencies are not used much in payments ... and in terms of the reserve of value, if you look at volatility, either they are".
"They are very challenging, because cryptocurrencies are great if you're trying to hide or wash money, we have to be very aware of that," he said.
He also noted that, although "there are investor and consumer protection problems", the cryptocurrency market is not big enough to threaten financial stability, and, therefore, the Fed does not seek to regulate it, according to a published note. on Bloomberg.
Powell's testimony comes hours before the Financial Services Committee prepares for a new hearing focused directly on cryptocurrencies. As previously reported by the CoinDesk portal, this call will focus on the question of whether cryptocurrencies are a new form of money.
A memorandum published after the hearing was announced, states in particular that members will examine "to what extent the United States government should consider cryptocurrencies as money and possible national and global uses thereof."
Digital currencies have become popular in recent years, and some of Wall Street's best-known figures, including Tom Lee of Fundstrat and stock investor Bill Miller, tend to spread their enthusiasm for them. The price of Bitcoin soared last year and the cryptocurrency was briefly traded above US $ 20,000, before a sharp fall in 2018.
Powell said earlier about the crypts last November, when he said that a drop in cryptocurrency assets would not destabilize an economy. He added, however, that "in the long term, cryptocurrencies and things of that nature could become important issues," also stating that the underlying technology of Blockchain and Bitcoin could be something that "would have significant applications in the payments side of the market." wholesale of the economy. "
Source: CoinDesk