Chairman of the US Federal Reserve, Jerome Powell commented that why would somebody need to own or trade cryptocurrencies when the US is going to have its own “digital Dollar”. He believes that once the digital dollar will be out, people would make their shift from crypto towards the digital dollar because they know that the USD is the global reserve currency holding its title for more than 90 years. He also suggested that there is no question about USD losing its title of “global reserve currency”.
There was an argument that USD currency was in danger and it is likely that it will lose its title of “global reserve currency”. However, the argument was duly responded to by Jerome Powell, the Chairman of the US Federal Reserve.
The Chairman firstly denied the argument that there is any potential threat to the USD. Instead, he claimed that for over a period of 90 years, USD has been serving the entire world as the global reserve currency. Within this time, there came many pandemics, natural catastrophes, economic crunches, and financial crises. However, none of these predicaments have ever endangered the well-being of the USD or exposed it to fatal damage. Instead, the dollar continued to be adopted by every single nation of the world, he claimed.
The Chairman then commented on the growing popularity of digital currencies. He said that he is neither against crypto nor in its favor. However, he would be the first one to appreciate when the US will develop a “digital dollar” i.e. US’s official CBDC.
Powell was attending a congressional hearing before a Committee of the US Senate on 14th July 2021. During the proceedings of the Senate, Stephen Lynch, a member of the Committee, asked crypto-related questions from the Fed Chairman. Lynch asked Fed Chairman how he would scale the success of the digital dollar while cryptocurrencies are existing.
In response, Powell stated that for sure there are more than a thousand different cryptocurrencies. The interest of the public is also involved in some of the notable cryptocurrencies like Bitcoin. But when there is going to be the “digital dollar”, who would not want to utilize it immediately. He suggested that in fact, people who are interested in crypto today will shift their interest into the digital dollar. The reason he elaborated is that the USD is undisputedly the world’s reserve currency for 90 years. This is the kind of surety every individual would want. Apparently, there is no such surety within cryptocurrencies as they are inherently speculative.
What Powell argued was that cryptocurrencies neither pose any threat to USD nor would they cause any harm to the digital dollar. Instead, the reality is to the contrary. The threat is towards cryptocurrencies from the USD and the forthcoming digital Dollar, opined Fed Chairman.