Interest in bitcoin and cryptocurrencies has jumped in the UK
- St. Louis Fed President James Bullard does not see bitcoin having a significant effect on the US dollar as a world currency leader.
- Bullard said most investors still want a “stable store of value” and a “safe haven,” both features he does not see in bitcoin just yet.
- The Fed president is more concerned with the effect of multiple privately issued and competing currencies.
- Sign up here for our daily newsletter, 10 Things Before the Opening Bell
St. Louis Federal Reserve President James Bullard does not believe bitcoin will have a significant impact on the role of the US dollar in the global economy.
Bullard, who has been at the helm of St. Louis Fed since 2008, said most investors still want a “stable store of value” and a “safe haven,” both features he does not see with cryptocurrencies such as bitcoin just yet.
“I just think for Fed policy, it’s going to be a dollar economy as far as the eye can see,” he said in an interview with CNBC Tuesday. “A dollar global economy, really, as far as the eye can see – and whether the gold price goes up or down, or the bitcoin price goes up or down, doesn’t really affect that.”
Bitcoin bulls tout the cryptocurrency as a hedge against inflation, but detractors still say the cryptocurrency is too volatile to be of value in most investment portfolios.
What the Fed president said he is more concerned about is transactions using a “privately-issued currency,” or getting to a scenario in which there are multiple competing currencies.
“You don’t want to go to a non-uniform currency where you’re walking into Starbucks and maybe you’ll pay with Ethereum, maybe you’ll pay with Ripple, maybe you’ll pay with bitcoin, maybe you’ll pay with a dollar.”
On Tuesday, the price of bitcoin broke above $50,000 for the first time, reaching $50,547.70 to bring its year-to-date gain to 74%.
Interest from major companies including Tesla, which announced a $1.5 billion investment, and Bank of New York Mellon and Mastercard, has driven the most recent rally.