Cryptocurrency has found itself on the center stage of the global political sphere over the past several weeks, which first began when Fed Chair Jerome Powell compared Bitcoin to gold. Shortly after this, US President Donald Trump shared his thoughts on BTC, which sparked what appears to be a regulatory crackdown on the nascent markets.
Now, the President of the St. Louis Federal Reserve is noting that cryptocurrencies are the newest entrants to the ongoing global currency competition, which means that, in his view, crypto is increasingly becoming a competitor to fiat currencies like the US Dollar.
Cryptocurrency Can and Is Competing with Fiat Currency, Claims St. Louis Fed President
Many cryptocurrency advocates have long claimed that the decentralized aspects of Bitcoin are what make it a better alternative to the US Dollar and other fiat currencies, but as of late it has become unclear as to whether or not Bitcoin is like a “Dollar 2.0”, or more like a “gold 2.0.”
Recently, Fed Chairman Jerome Powell explained during a recent testimony in front of the US Senate that as of now Bitcoin is more comparable to gold, as it is primarily used as a “speculative store of value,” and that its somewhat infrequent use for transactions negate its status as a currency.
How far we’ve come. The Chairman of the Federal Reserve just compared bitcoin to gold
Folks, it’s happeninghttps://t.co/onVmTj4hUk
— Barry Silbert (@barrysilbert) July 11, 2019
Despite this, James Bullard, the President of the St. Louis Federal Reserve, recently noted that cryptocurrencies are still creating a movement towards having a non-uniform currency in the United States, which signals that they are in fact competitors to fiat currency.
“Cryptocurrencies are creating drift toward a non-uniform currency in the U.S., a state of affairs that has existed historically but was disliked and eventually replaced,” he explained during a recent presentation.
Furthermore, Bullard also explained that he believes cryptocurrencies are the newest entrants into what he describes as the “ongoing global currency competition.”
“I want to view cryptocurrencies of various types as new entrants into the ongoing global currency competition,” he said.
Crypto Trend Could Lead to a Non-Uniform International Currency System
One key aspect of Bitcoin that makes it unique from fiat currencies is that it is borderless, and its utility is not limited by geographical regions.
That fact has led Bullard to believe that the increasingly popular crypto trend is ushering in a new era of global finance, which could result in the formation of a non-uniform global currency system.
“I am arguing that the current cryptocurrency wave may be driving the U.S. uniform currency system toward something more like the international non-uniform currency system,” he boldly stated.
Although only time will tell as to whether or not the rapidly growing popularity of the crypto markets will be enough to start altering (or moreover, modernizing) the global finance system, there’s no question the Bitcoin helped create, and is largely the result of, the global population yearning for a more decentralized world.
Featured image from Shutterstock