Bitcoin Is Clearly a Store of Value
The Federal Reserve Bank of Dallas president says bitcoin is
clearly “a store of value.” Emphasizing the differences between
cryptocurrencies, like bitcoin, and central bank digital currencies,
he said the latter “won’t necessarily be a store of value.”
Fed Bank Chief Calls Bitcoin a Store of Value
The president of the Federal Reserve Bank of Dallas, Robert Kaplan,
talked about bitcoin and central bank digital currencies (CBDCs) Friday
at the Texas A&M Bitcoin Conference 2021 hosted by Mays Business School.
Firstly, Kaplan explained that he would distinguish between bitcoin and
central bank digital currencies. “I would differentiate between a cryptocurrency,
like bitcoin, and the discussions that are being had about digital currency,”
such as the digital yuan experiment in China, he described.
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He proceeded to explain that the challenge on bitcoin is “how widely
it will be adopted.” The Federal Reserve Bank of Dallas chief elaborated:
Right now, it’s clear it’s a store of value.
“It obviously moves a lot in value,” he continued. “That may keep
it from spreading too far as a medium of exchange and wide adoption
but that can change and that will evolve.”
The Fed bank chief also confirmed that he and his team
“have studied intensely and will keep studying bitcoin and other cryptocurrencies.”
He then talked about central bank digital currencies, emphasizing:
The discussions around the world on digital currency are slightly
different in that a digital currency won’t necessarily be a store of value.
“If you’re worried about the value of underlying currency, digital currency
is likely to be, for example in China, tied to the value of the underlying,”
he detailed, adding that it’s also “a way of ease of payment, domestic
payments first, getting money to where it’s needed.”
Kaplan further opined: “In some cases, you could argue in China it’s
a way to monitor flows … and then ultimately how far will this go,
and there’s been speculation about global payments and the implications.”
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As for the digital dollar, Federal Reserve Chairman Jerome Powell
said in February that the Fed is actively studying the possibility of
issuing a digital dollar. He emphasized that it is a “very high priority
project” for the Fed. Meanwhile, the Federal Reserve Bank of Boston
and the Massachusetts Institute of Technology (MIT) plan to unveil
at least two prototypes of a digital dollar in the third quarter of this year.