James Bullard, President of the US’s central bank i.e. Federal Reserve Bank has spoken on the subject of Bitcoin and the fact of increased investor interest in it. He said that US Dollar has a significant role to play in the global economy and therefore has its unique place amongst the prevailing financial system. He was of the view that the existence of cryptocurrency or in particular Bitcoin does not pose any potential threat to USD.
While the craze of Bitcoin investment has grown into fanaticism, yet many started to debate that this will jeopardize the US’s national currency.
US Dollar has a significant role amongst the currencies of the world and is regarded as the sole global reserve currency. However, since last month, there has been a debate that suggests that due to ever-growing interest in Bitcoin, USD is losing its worth. But in the words of James Bullard, US central bank’s President, the argument is fallacious for so many reasons. He expressly suggested that neither Bitcoin nor any other digital asset poses any potential threat to the well-being of the US’s national currency.
Bullard was interviewed by CNBC where he mentioned that US Dollar would never lose its worth as global reserve fiat. He added that though Bitcoin has been on the bull-run and has achieved several all-time highs since the past year, yet it doesn’t harm USD.
He commented that as far as he can see into the future, it is USD that is going to be used as the global economy. He explained further that the future of USD is safe even if there are ups and downs within the Gold and the digital economy. However, he described his concern over certain digital assets’ use for transactions that have not been supported by respective governments.
Bullard pointed out that undeniably, USD has already been used electronically and there hasn’t been any apparent issue with regard to that. However, the issue is with those digital currencies which have apparently been issued privately, he asserted.
During his talk, he also referred to the past history when Civil War started and ended. He mentioned that during the times of the Civil War, there were several banks that used to issue their own versions of Dollars. Amongst them were banks such as Wells Faro, JP Morgan as well as Bank of America, who all had their own unique US Dollars.
He said that the three banks were offering discounted rates on trading to their customers but overall the public didn’t like the concept. The concept has been projected again in the shape of Bitcoin and in his view Bitcoin is likely to face some consequences.
Regarding Bitcoin’s potential threat towards USD, he said that he is a strong believer in fair competition. He said that the investors have been going through a competition of currencies. If they are able to find an alternate store for safekeeping of their money, then it is their right to do so, suggested Bullard.