James Bullard, president of the Federal Reserve Bank of St. Louis, seemingly doesn’t understand why many are looking to cryptocurrency as a medium of exchange instead of a uniform currency like the U.S. dollar.
In an interview with CNBC’s Squawk Box on Tuesday, Bullard said the issue for making payments isn’t currencies that can be traded electronically but rather privately issued ones, as is the case for many cryptocurrencies. He referenced a time in the United States before the Civil War when there was confusion and a dislike for trading the “equivalent of Bank of America dollars and JPMorgan dollars and Wells Fargo dollars.”
“I think the same thing would occur with Bitcoin here,” said Bullard. “You don't want to go to a non-uniform 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 — that isn't how we do this.”
The Fed president referenced other privately issued currencies globally that are required to abide by the same restrictions as any currency issued by a central authority. He said private currencies aren't able to maintain a stable value against goods and other currencies, nor is their future supply "at all clear."
Bullard’s comments came as Bitcoin (BTC) hit a new all-time high price of more than $50,000 Tuesday morning. Though the Fed president said characterizing the crypto asset as a rival to gold “might be a good way to think about” Bitcoin, he largely reserved his bullish remarks for the U.S. dollar.
“It's going to be a dollar economy as far as the eye can see and a dollar global economy really as far as the eye can see. Whether the gold price goes up or down or the Bitcoin price goes up or down doesn't really affect that.”