Fed chair says cryptocurrencies are vehicles for speculation

Jerome Powell

The Federal Reserve chairman believes that cryptocurrencies are really a vehicle for speculation, and no one is using them for payments. He then compared crypto to gold.

Jerome Powell talked about cryptocurrency in an interview with The Economic Club of New York on Wednesday, in an event that took place following the Coinbase direct listing on Nasdaq, which is seen as a watershed moment for the crypto space.

And with the rising popularity of Bitcoin and cryptocurrencies, he was asked if he was worried about the impact they may have on the economy, and the ability for people to use them as payments.

Powell explained that firstly, he thinks of them more as crypto assets, adding:

“What people call cryptocurrencies, they’re really vehicles for speculation. No one is using them for payments, for example, like the dollar.”

Nevertheless, it was in February that Powell revealed that the digital dollar is a very high priority project for the Federal Reserve.

The Fed chair proceeded to compare cryptocurrency to gold in terms of how it is used for speculation for thousands of years. Human beings have given gold a special value that it doesn’t have. Bitcoin and cryptocurrencies are much more like that, in his view.

They are not really being actively used as payment, Powell said.

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