The president of the Federal Reserve of the United States said that a cryptocurrency system adopted worldwide could eliminate the need for reserve currencies.
Fed Chairman Jerome Powell testified before the Banking Committee of the Senate on July 11 and analyzed whether a cryptocurrency system with global prevalence could decrease, or even go so far as to eliminate the need for so-called anchor coins.
With the de facto United States dollar, the dominant reserve currency in the world, Powell acknowledged the possibility that a pre-eminent cryptocurrency would redesign the current financial landscape, but even so, this has not yet become a reality . The president of the Fed said:
"I think things like that [the obsolescence of today’s reserve currencies] they are possible but really […] I have not seen widespread adoption. Bitcoin is a good example, almost nobody uses it for payments […] it is a speculative store of value like gold. "
Powell's comparison is remarkable given the role of the Federal Reserve Bank of New York as custodian of gold held by entities such as the US. UU And foreign governments, other central banks and official international organizations.
Powell acknowledged that the prospect of cryptocurrencies replacing reserve currencies has been implicit since its inception and that its realization could see the global financial system, and specifically the Federal Reserve System, profoundly transformed. He noticed:
"People have been talking about this since cryptocurrencies arose, but we have not seen it." That does not mean we do not, and if we do, then yes, I could see a return to an era in the United States where we had many different currencies, in the so-called era of the national bank ".
As reported, Powell had testified before the House Financial Services Committee earlier this week and acknowledged that the impact of Libra's upcoming Facebook posting could be a "potentially systemic scale" for the financial landscape and global regulatory
In China, central bank veterans have characterized the widespread prediction that Libra is "inseparable from the trend of global dollarization" and stressed that Beijing must respond with precautions and rigorous policy research to try to maintain a sound monetary state.