Fed Chairman Powell: Bitcoin is more like gold, it is not impossible to replace the dollar

The second day of Federal Reserve Chairman Jerome Powell's participation in the US Senate hearing, cryptocurrency once again became the focus. Today, lawmakers expressed their concern that Bitcoin and other cryptocurrencies pose a threat to the financial system, including the potential challenge of Bitcoin replacing the US dollar as the world's reserve currency.

On the second day of Powell’s testimony, senators reiterated their concerns about private companies such as Facebook, which are now using their money and power to try to create their own monetary and monetary policies.

Lawmakers are also worried that the United States lags behind other countries in real-time payment methods.

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In response, Powell responded: he did not see Bitcoin being used as a payment method.

However, he pointed out that as a means of storing value, Bitcoin has increasingly replaced gold in the global economy.

“Almost no one pays with bitcoin. They use it more to replace gold. This is a value store; it's a speculative way of storing value, just like gold.”

Members also mentioned that they are uneasy about the possibility that Bitcoin will replace the US dollar as the world's reserve currency.

Powell admits that this is possible – albeit only in the long run. He also stressed that the United States should not assume that the status of the dollar as a reserve currency will remain forever.

"I think this kind of situation is possible, but we have not seen the full popularity… but this does not mean that this will not happen. Once it happens, the United States will return to the era when there are many different currencies. That is, the era of the national bank ^[1] ."

Powell also said that using the US dollar as the world's reserve currency can bring advantages, but it also means bearing costs. He also claimed that to replace the US dollar as the world's reserve currency, the issuing country must have a rule of law and a highly developed financial system.

As the world's most important central bank, the Fed sees bitcoin as a means of value storage, which is obviously of great significance. Many cryptocurrency enthusiasts celebrate this victory on Twitter.

However, with regard to Powell's view of the global reserve currency, gold enthusiast Peter Schiff quickly pointed out:

"Powell is wrong. The world does not need another reserve currency to replace the dollar. Gold is a reserve asset better than any legal currency. In fact, gold reserves can legalize the currencies it supports. With gold Support, the dollar became the reserve currency."

Yesterday, Powell also pointed out that Facebook's Libra project could not "move forward" without first addressing issues such as money laundering, privacy and customer protection.

1. The National Banking Act of 1863 and 1864 is the United States' two federal banking laws that created the National Banking System, which encourages the development of a national currency supported by US Treasury bonds held by banks and establishes a currency. The Office of the Supervisor, as part of the US Treasury, and a system of state-licensed banks. The bill shaped today's national banking system and supported the US's unified banking policy. ↵

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