Federal Reserve Chairman Jerome Powell shared his views on cryptocurrencies during an interview with The Economic Club of New York, just as Coinbase went public via direct listing on Nasdaq. He described cryptocurrencies as “vehicles for speculation,” emphasizing that they are not being used for payments in the same way as the U.S. dollar.
Powell: Crypto Is More an Asset Than a Currency
When asked about the impact of rising crypto adoption on the economy, Powell first clarified that the Fed views them as “crypto assets.” He elaborated, “What people call cryptocurrencies, they’re really vehicles for speculation. No one is using them for payments, for example, like the dollar.” Powell stressed that the real-world payment usage of cryptocurrencies is negligible.
Comparison with Gold: Speculation Shared
Powell drew an analogy between cryptocurrencies and gold. “For thousands of years, human beings have given gold a special value that it doesn’t have,” he said, noting that bitcoin and other cryptocurrencies are “much more like that.” He reiterated that they are not actively used as a medium of exchange.
Digital Dollar: A Top Priority for the Fed
Powell reaffirmed the importance of a digital dollar, calling it “a very high priority project for us.” He previously stated that crypto is essentially a substitute for gold, not for the dollar. He also warned that the public must understand the risks: “There’s the volatility. There’s also the outsized energy requirement for mining, and the fact that they’re not backed by anything.” These comments echoed Treasury Secretary Janet Yellen’s characterization of bitcoin as a highly speculative asset. Overall, Powell’s remarks underline the Fed’s cautious stance toward crypto while advancing its own digital currency initiative.