St. Louis Fed President: Bitcoin Is Not A Threat To The US Dollar
The St. Louis Fed President, James Bullard, says he is confident that Bitcoin poses no threat to the US Dollar’s hegemony.
James Bullard was speaking on a CNBC interview and said no matter how high the Bitcoin price goes, it will have no effect on the US dollar’s reserve currency status.
‘I just think for Fed policy, it’s going to be a dollar economy as far as the eye can see, a dollar global economy really as far as the eye can see,’ explained Bullard. ‘And whether the gold price goes up or down, or the Bitcoin price goes up or down, doesn’t really affect that.’
There Are Always Currency Competitions, This Is Nothing New
James Bullard has been the the president of the Federal Reserve Bank of St. Louis since 2008, and the respected economist stressed that competition for a reserve currency and safe havens was nothing new.
‘It is a currency competition, and investors want a safe haven. They want a stable store of value, and then they want to conduct their investments in that currency,” explained Bullard who used recent competition from the Euro and Japanese Yen to ram his point home.
‘Neither of those is going to replace the dollar,’ stressed Bullard. ‘It’d be very hard to get a private currency that’s really more like gold to play that role so I don’t think we’re going to see any changes in the future.’
Different Currencies Didn’t Work During The Civil War Era, So They Can’t Work Now, Says James Bullard
The only concern the St. Louis Fed president seemed to have was the amount of privately issued currencies in the cryptosphere.
Bullard surprisingly brought up the time before the Civil War to emphasize his point. Back then different financial institutions were issuing their own brand of dollars, which made things difficult.
‘They were all trading around and they traded at different discounts to each other, and people did not like it at all,’ explained Bullard. ‘I think the same thing would occur with Bitcoin here.’
Bullard showed more naivety, however, bringing altcoins into his argument. The St. Louis Fed president said the choice of paying in Ethereum, Ripple or whatever nonuniform currency simply wouldn’t fit.
‘You don’t want to go to a nonuniform 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,’ explained James Bullard. ‘That isn’t how we do this. We have a uniform currency that came in at the Civil War time,’ explained the Fed president.
Bitcoin Isn’t A Threat To The Dollar, But To Compare 2021 To The Civil War Era Shows Ignorance
It doesn’t take a genius to determine the Civil War era wasn’t digital, and money wasn’t programmable like Bitcoin, so comparing today’s payment options to the 1860s is strange.
Anyone wanting to pay for something back then had to use paper notes. Bitcoin is programmable money and there are already ways of spending BTC, which instantly converts it into USD for the merchant.
Of course this strengthens the US dollar as well, but to use an era when everyone was riding round on horses and mail was wax sealed and took an age to deliver, shows ignorance and naivety from the St. Louis Fed president.
That’s not to say Bitcoin is a threat to the US dollar, yet, but in time it will grow to become one, especially as the Federal Reserve continues to debase the dollar.
A Bitcoiner since 2017 and a Bitcoin Maximalist since 2018, Tommy is our main writer and editor at Bitcoin Maximalist. Other than researching and writing about Bitcoin, Tommy loves spending time with his family and supporting his beloved Leeds United.