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- US Federal Reserve Bank president has considered Bitcoin as a means of storing value
- The bank is concerned regarding the inflation in the country, which is ultimately diverting the investors and firms towards Bitcoin
- Although the US officials are not in favor of Bitcoin, but they are in favor of CBDC
US Federal Reserve Bank President Robert Kaplan has considered that Bitcoin is a means of storing value. Late last week, at a Bitcoin conference, Kaplan stated such statements, which was hosted by the Mays Innovation Research center at the University of Texas A&M. According to Kaplan, cryptocurrencies like Bitcoin and the underlying technology like blockchain are truly innovating. Although Bitcoin is a value of exchange because of its significant price volatility, it has not become widespread as a means.
US Federal Reserve Bank is concerned regarding inflation
Last month, the Consumer Price Index of the United States was observed rising by 2.6% every year. According to Jerome Powell, the rise in inflation was temporary and is not severe enough to shift the country’s low-interest-rate policy.
Regarding the factor, the US Federal Reserve Bank president explained that the current signs of inflation in the country are due to supply and demand imbalances. Moreover, structural forces like disruptive change and aging have limited pricing power. Following the aforementioned factors, it is deemed challenging to determine whether price adjustments are temporary or sustainable.
Hence if the price trends have a significant influence on the central bank’s policies, that stats can be deemed as a hot indicator of cryptocurrency investors. Indeed, several investors and firms have divided in the Bitcoin wagon after following the declining USD value.
FED’s stance regarding central bank digital currency
In the conference, Kaplan mentioned that it is vital for the US Federal Reserve Bank to embark on the development of central bank digital currencies (CBDC). Moreover, the US digital dollar is likely to be tied to the value of the underlying currency, which is a different agenda than Bitcoin.
According to Powell, this year is going to be a significant year for the United States regarding the digital dollar project. This means the country will actively engage in discussions with individuals through public events related to CBDC. Meanwhile, the FED has also published a report entitled “Preconditions for a general-purpose central bank digital currency”, which explained the CBDC framework. However, where the US government is evaluating Bitcoin as an inefficient payment system, CBDC issuance is being supported.
