Federal Reserve Chairman Jerome Powell holds a press conference following the two-day meeting of the Federal Reserve’s Federal Open Market Committee on July 31, 2019 in Washington.
Sarah Silbiger | Reuters
Cryptocurrencies are primarily used to place bets on price hikes and have not yet reached the status of payment mechanisms, Federal Reserve chairman Jerome Powell said on Wednesday.
“They are really speculative means,” said the central bank chief of the Economic Club of New York in a virtual interview with David Rubenstein, co-founder of the Carlyle Group. “They are not really actively used as a means of payment.”
Powell compared crypto to gold.
“For thousands of years people have given gold a special value that it doesn’t have,” he said as an industrial metal.
The comments come on the same day that Coinbase goes public in a direct listing on Nasdaq, an exchange weighted with tech companies.
Coinbase is the predominant exchange for trading Bitcoin and other cryptocurrencies. It opened at $ 381 per share, well above the reference price of $ 250. The company announced it had $ 1.8 billion in revenue in the first quarter as prices for Bitcoin, Ethereum, and other crypto names rose sharply.
Powell’s predecessor at the Fed, Janet Yellen, is now Treasury Secretary. In February, it told CNBC that it viewed Bitcoin as a “highly speculative asset” and said it was not “widely used as a transmission mechanism” and an “extremely inefficient way of conducting transactions”.
In addition to a brief conversation about crypto, the Powell interview covered a variety of other topics, much of which was known to the Fed leader.
One revelation was that Powell has not yet met with President Joe Biden.
Fed observers have speculated whether Biden Powell will give Powell another term as chairman when the current one expires in 2022. I’m doing the best job i can. “
Powell said he has had no contact with Biden since he became president nearly three months ago.
When asked if he ever met Biden, Powell said, “I think I shook his hand, but I didn’t actually meet him and speak to him.”
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