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Chairman of the Federal Reserve Jerome Powell was about the perception of Bitcoin (CRYPTO: BTC) at the DealBook Summit on Wednesday, claiming that the cryptocurrency is more similar to gold than the US dollar.
“People use Bitcoin as a speculative asset. It’s like gold: it’s just virtual and digital,” Powell said during the discussion.
Powell debunked the idea that Bitcoin would undermine the Federal Reserve or the strength of the US dollar, emphasizing that Bitcoin is not used as a primary form of payment or as a reliable store of value due to its high volatility.
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“It is not a competitor for the dollar. It really rivals gold,” he added.
Asked about a potential national Bitcoin reserve, Powell emphasized the Federal Reserve’s goal 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 is not the Federal Reserve’s responsibility to regulate the cryptocurrency industry.
When asked if he owns Bitcoin himself, Powell said: “He shouldn’t 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 declining inflation.
He noted that the economy is growing at about 2.5% annually, while inflation has fallen from over 7% to about 2.3%, while unemployment rates remain stable.
This economic stability gives the Federal Reserve the flexibility to take a cautious approach toward reaching a “neutral” interest rate level.
This methodical approach aims to minimize risks; Too fast an approach could reverse progress on inflation, while a slow approach could hurt the labor market.
