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Federal Reserve Chair Jerome Powell addressed the perception of Bitcoin (CRYPTO: BTC) at the DealBook Summit on Wednesday, asserting that the cryptocurrency is more akin to gold than the U.S. dollar.
“People use Bitcoin as a speculative asset. It’s like gold—it’s just virtual and digital,” Powell said during the discussion.
Powell dispelled notions that Bitcoin undermines the Federal Reserve or the strength of the U.S. dollar and highlighted that Bitcoin is not being used as a primary form of payment or as a reliable store of value due to its high volatility.
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“It’s not a competitor for the dollar. It’s really a competitor for gold,” he added.
Asked about a potential national Bitcoin reserve, Powell stressed the Federal Reserve’s objective of keeping the banking system “safe and sound.”
Possible interaction between the cryptocurrency ecosystem and the traditional financial banking system should not threaten the latter’s health, Powell said.
He further pointed out that it isn’t the Federal Reserve’s responsibility to regulate the cryptocurrency industry.
Asked whether he owns any Bitcoin himself, Powell said “he is not allowed” to own it.
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Powell also discussed the state of the U.S. economy, saying it “is in remarkably good shape.”
Powell attributed this strength to stable growth and decreasing inflation.
He noted that the economy is growing at approximately 2.5% annually, while inflation has decreased from over 7% to around 2.3%, all while maintaining steady unemployment rates.
This economic stability allows the Federal Reserve the flexibility to adopt a cautious approach towards reaching a “neutral” interest rate level.
This methodical approach aims to minimize risks; moving too quickly might reverse progress on inflation, while a slow approach might hurt the labor market.
