Cryptocurrencies took the center stage again during Federal Reserve Chairman Jerome Powell’s second day of testimony before the U.S. Senate. Today, lawmakers expressed their concerns about the threat that bitcoin and other cryptocurrencies pose to the financial system, including the possible challenge of bitcoin replacing the U.S. dollar as the world reserve currency.
Powell: The U.S. Should Not Assume That The Dollar’s Status As A Reserve Currency Would Last Forever
During the second day of Jerome Powell’s testimony, senators reiterated their concern about private corporations, such as Facebook, who with their money and power are now attempting to create their own currency and monetary policy.
Lawmakers also worried that the U.S. was lagging behind other nations on real-time payment methods.
In this connection, Powell indicated that he had not seen bitcoin used as a payment method.
However, he noted, bitcoin is already increasingly taking over gold in the global economy as a store of value.
“It’s a store of value” — Jerome Powell, Chairman of the Federal Reserve talking to the Senate Banking Committee about Bitcoin
THE VIRUS IS SPREADING 🔥
— Pomp 🌪 (@APompliano) July 11, 2019
Lawmakers also mentioned their uneasiness regarding bitcoin’s possible long-term challenge to replace the U.S. dollar as the world reserve currency.
Powell admitted that this was in the realm of possibility, albeit only in the long term. He also emphasized that the U.S. should not assume that the dollar’s status as a reserve currency would last forever.
POWELL: DON’T ASSUME USD STATUS AS RESERVE CURRENCY PERMANENT
— zerohedge (@zerohedge) July 11, 2019
Powell also said that having the dollar as the world reserve currency conveyed both benefits and costs.