Saga Launches Its Stablecoin Backed by a Fiat Currency Basket

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Saga Launches Its Stablecoin Backed by a Fiat Currency Basket
SGA, the basket-backed stablecoin, that was announced by the Saga Foundation last year, has gone live.
Saga Launches Its Stablecoin Backed by a Fiat Currency Basket

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Source: CoinSpeaker

Former CFTC Head Joins Law Company to Push for Digital Dollar

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Former CFTC Head Joins Law Company to Push for Digital Dollar
Former CFTC Chairman Christopher Giancarlo, known as “Crypto Dad”, is set to join Willkie Farr & Gallagher as its senior counsel and to lobby for blockchain-based digital dollar concept.
Former CFTC Head Joins Law Company to Push for Digital Dollar

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How Blockchain Revolution is Driving Central Banks to Issue Crypto backed by FIAT

US Feds adds stablecoins to the list of risks of the potential risk to the financial system.
The CSO of Blockstream, Samson Mow, explains how stablecoins won’t last for long, and it will to ‘hyperbitcoinization.’
China’s push towards digital renminbi could act as the catalyst for further adoption of crypto.

In its recent report on financial stability, the Federal Reserve in the US said the economy was resilient. While rising debt is a reason for worry, there is still time before the destructive effects of rising corporate deficits will affect the economy.
Nevertheless, that does not mean that it is not prone to adversities. According to the report, low-interest rates and stablecoins pose a severe risk to stability in the future. The report concluded,
“The possibility for a stablecoin payment network to quickly achieve global scale introduces important challenges and risks related to financial stability, monetary policy, safeguards against money laundering and terrorist financing, and consumer and investor protection,”
Privately Issued Stablecoins and International Competition Leaves Little Choice
A blockchain-based currency provides for seamless, transparent, and efficient global payments. However, their application can be exploited for money laundering and other international crimes. Hence, the western governments of the world have been wary of them.
Stablecoins has become mainstream in 2019 after Facebook’s Libra announcement and China’s push towards Digital Renminbi. There are various other independent private efforts from the likes of Facebook, JP Morgan, and Walmart to issue USD backed stablecoins. Hence, the most natural path for the central banks will be issue to one of their own.
Leading crypto analyst and entrepreneur, Samson Mow talked about the current state of the stablecoins market with USDT leading the space. He said,
They’re a temporary thing. The main threat they face is from the national cryptocurrencies. How open will those national cryptocurrencies be? …But stablecoins will then have no reason to exist with a national cryptocurrency.
He also added that this would eventually lead to ‘hyperbitcoinization.’ The growth of stablecoins and national cryptocurrencies is leading the world towards an of bitcoin.
Do you agree with the analysts’ views? Please share your views with us.  
The post How Blockchain Revolution is Driving Central Banks to Issue Crypto backed by FIAT appeared first on Coingape.
Source: CoinGape

Bitcoin Eyes Price Rally as Fed Announces Pseudo-QE

Bitcoin is about to become a hot asset as the US central bank goes ahead with its pseudo-quantitative easing program, believes a few bigwigs.
Travis Kling, the chief investment officer at California-based Ikigai Asset Management, called bitcoin “an insurance policy” against Jerome Powell’s decision to resume Treasury purchases. The Federal Reserve chairman on Tuesday confirmed that they would purchase short-term bonds to expand their balance sheets.
Fed’s move, according to Kling, signals a liquidity crunch in the US market, which means the central bank is injecting a fresh supply of dollar-denominated assets to stimulate the US economy. It is an equivalent of quantitative easing (QE).
“Welcome to QE4,” tweeted Kling.

"I want to emphasize that growth of our balance sheet for reserve management purposes should in no way be confused with the large-scale asset purchase programs."-Jay Powell, today
Bitcoin is an insurance policy against monetary & fiscal policy irresponsibility.
Welcome to QE4.
— Travis Kling (@Travis_Kling) October 8, 2019

Fed: Everything is Fine
Powell refused to call the Treasury Purchase a QE program, stating that it is nowhere the same as the crisis-era program launched after the 2008 financial crisis.
“I want to emphasize that growth of our balance sheet for reserve management purposes should in no way be confused with the large-scale asset purchase programs that we deployed after the financial crisis,” he told the National Association of Business Economists.
The weight of the Fed’s decision is going to fall on an oversupplied US dollar – at least in the short-term. Moreover, another factor that could further weaken the greenback is Powell’s inclination towards another rate cut.
The Fed chief coupled his Treasury-buying announcement with another inflationary news. He said the Fed could cut benchmark rates by 25 bps at the next Federal Open Market Committee meeting. That shows that Powell is adding more insurance against market uncertainties caused by, as he said, “trade, Brexit, and other issues.”
Meanwhile, staunch bitcoin skeptic and gold bull Peter Schiff said that Fed’s latest decisions proved that the US economy is in bad shape. The Euro Pacific Capital CEO tweeted:

Within a few months it's likely that the Fed's balance sheet will exceed the $4.5 trillion peak it hit prior to the Fed doing QT. Sometime in 2020 the Fed's balance sheet will grow beyond $5 trillion, and will likely keep growing indefinitely. But don't worry, it's not QE!
— Peter Schiff (@PeterSchiff) October 8, 2019

“If it looks like a duck, walks like a duck, and quacks like a duck, it’s a duck. No matter what Powell claims, the Fed is doing QE, as I predicted it would. The goal is to suppress interest rates to sustain debt and asset bubbles. The only difference is this time in won’t work!”
Unlike Kling, Schiff thinks Gold would beat bitcoin in terms of gains against a weaker dollar.

China’s Most Recent Gold-Buying Spree Tops 100 Tons @schiffgold https://t.co/NfehkgGAR2
— Peter Schiff (@PeterSchiff) October 8, 2019

A “Rocket Fuel” Bitcoin Rally
Sweden-based Youtuber Ivan on Tech sided with Kling on his upside prediction for bitcoin. He said the news of the Fed’s bond purchasing program could “rocket fuel” the cryptocurrency.

FED: starts QEAlso FED: This is definitely NOT QE
NEVER BELIEVE ANYTHING UNTIL IT IS OFFICIALLY DENIED
This is Bitcoin Rocket Fuel https://t.co/6fmJ9O03v4
— Ivan on Tech (@IvanOnTech) October 9, 2019

Meanwhile, Priya Misra of TD Securities stressed that Powell’s program appears a lot like QE, but it is not one.
“This was the only sustainable and permanent solution,” she stated.
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U.S. Congressmen Want the Federal Reserve to Consider a Digital Dollar

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U.S. Congressmen Want the Federal Reserve to Consider a Digital Dollar
Two U.S. Congressmen have written to the Federal Reserve, on the possibility of tokenizing the dollar. The Congressmen believe that such a move is inevitable.
U.S. Congressmen Want the Federal Reserve to Consider a Digital Dollar

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Source: CoinSpeaker

Facebook’s Libra could give birth to a ‘shadow banking’ system, claims United States’ Federal Advisory Council

At this month’s Federal Advisory Council meeting, the United States’ biggest banks (including CEOs Rene Jones of M&T Bank Corp., Beth Mooney of KeyCorp, and Brian Moynihan of Bank of America Corp) were asked by the Federal Reserve about their thoughts on Libra, the stablecoin proposed by social media giant Facebook. And, according to a […]
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Source: AMB Crypto

Central Bankers Ready to Boost Bitcoin Price Sky-High; Here’s Why

According to its proponents, the value proposition of Bitcoin (BTC) was dramatically accentuated on Thursday, when central bankers continued their march towards debasement and uncharted monetary territory.
Related Reading: Bitcoin’s Next Bull Run May Be Sparked By S&P 500 Uptrend, Claims Analyst
Why Crypto: European Central Bank Cuts Rates, Commences QE
For those who missed the memo, the European Central Bank (ECB) on Thursday revealed that it would be activating yet another round of dovish monetary policies.
While cryptocurrencies were created to be abstracted from the ins and outs of the fiat world, analysts say that this move by the ECB, coupled with similar steps from other leading central banks, should only prove the need for Bitcoin.
According to a report from CNN, the monetary body overseeing the Euro cut its interest rate for deposits by 10 BPS (0.1%) to -0.5%. Simultaneously, the central bank revealed that it would be starting another round of quantitative easing (QE), promising to purchase some 20 million Euros worth of bonds and “other financial assets” (not Bitcoin, that’s for sure) every month in hopes that the economy will remain stimulated.
This comes after President Trump called for the Federal Reserve, which is technically not a governmental organization, to “get our interest rates down to ZERO, or less”. What’s crazy is that Alan Greenspan, the former chairman of the American monetary authority, has argued that it won’t be long before rates go negative in the U.S.
Also, the ECB’s move to inject more liquidity into their flagging economy comes amidst news that the People’s Bank of China will start cutting rates “as early as next week”. 
Related Reading: Buy Bitcoin: Legendary Hedge Fund Manager Bashes QE, Low Interest Rates
Dovish Central Banks to Only Boost Bitcoin
Bitcoin proponents immediately responded to all this news with dismay, showing the irrationality of these policies, which they claim will amount to a catalyst for an increase in the value of non-fiat monies.
Travis Kling, a former institutional investor turned head of crypto fund Ikigai, wrote that the ECB, by buying 20 million Euros worth of assets, is injecting more money into the economy than the 30-day circulating supply of Bitcoin.

Today the ECB cut rates to -0.50% & restarted QE at €20bn/month OPEN-ENDED.
The ECB is buying more bonds every month than the 30-day circulating supply of BTC
Fed is cutting next week. PBoC is cutting next week.
A race amongst central bankers to devalue their currencies ASAP.
— Travis Kling (@Travis_Kling) September 12, 2019

Kling writes that all the money printing mentioned earlier is effectively “a race amongst central bankers to devalue their currencies ASAP”.
He writes that with the “entire world racing” to see who can devalue their fiat currency the fastest, assets with “PROVABLE SCARCITY” should begin to shine. By this, he is obviously referring to something like Bitcoin. As Kling said at a recent event:
“Bitcoin is currently a risk asset. But it’s a risk asset with a specific set of investment characteristics that will only become more attractive the more irresponsible monetary and fiscal policy becomes.”
Indeed, countless analysts have said that the further central banks try and print money, the further Bitcoin will climb. Tom Lee of Fundstrat has stated that these moves from the Federal Reserve and its ilk to cut rates will only increase the level of capital entering the Bitcoin markets.
Henny Sender of the Financial Times has corroborated this. She wrote in a column for the Nikkei Asian Review that the cutting of rates and the use of open market operations, “which amount to competitive currency devaluations in the name of reflating economies”, are driving up the price of Bitcoin.
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Bullish For Bitcoin? Trump Turns Up Pressure on Federal Reserve to Cut Interest Rates

President Trump is continuing to pressure the Federal Reserve for dragging its feet on interest rate cuts. For some, such aggressive economic policy is yet another inadvertent advertisement for Bitcoin for the US president.
Donald Trump recently declared himself as being generally opposed to Bitcoin and cryptocurrency. However, for some analysts, the president is doing a first rate job of making the technology more appealing.
Will Trump’s Aggressive Economic Policy Drive People Towards Bitcoin?
Taking to Twitter earlier today, President Trump stated that he would like to see the Federal Reserve cut interest rates soon. He argues that if the economy takes a downturn in the future then it will be more costly to take action then, rather than preemptively.

It is far more costly for the Federal Reserve to cut deeper if the economy actually does, in the future, turn down! Very inexpensive, in fact productive, to move now. The Fed raised & tightened far too much & too fast. In other words, they missed it (Big!). Don’t miss it again!
— Donald J. Trump (@realDonaldTrump) July 22, 2019

In another Tweet, he writes:
“With almost no inflation, our Country is needlessly being forced to pay a MUCH higher interest rate than other countries only because of a very misguided Federal Reserve.”
Business Insider has described the president’s Tweets towards the Federal Reserve as being a “forceful pressure campaign”. Along with publicly encouraging the supposedly politically independent central bank to cut rates, the president has also recently suggested a return of quantitative easing (printing money).
Trump’s economic policies have drawn considerable attention from the Bitcoin and wider crypto asset industry. Since Bitcoin represents an asset free from the meddling of politicians, policies that result in a less powerful dollar in the world are met frequently met with scorn from those in favour of the fintech innovation.
Bitcoin advocates frequently hold that assets that are strictly limited in supply provide a much better form of money than fiat currencies that are prone to the whims of global policy makers. For many, fiat currency is an historical anomaly and its use as the dominant medium of exchange on the planet cannot continue indefinitely. The merits of a sound asset will eventually shine over the ever-devaluing dollars, euros, and pounds of the world.
Highlighting this earlier today was trader, analyst, and general Bitcoin proponent Luke Martin:

Trump is bullying the Fed to cut now.
He doesn't have to like Bitcoin, but Bitcoin holders do have to like how the macro picture is coming together. https://t.co/pwlO3qbkkb
— Luke Martin (@VentureCoinist) July 22, 2019

In the above Tweet, Martin argues that Trump’s latest posturing versus the Federal Reserve is yet another example of a politician deliberately weakening a national currency at the expense of their people for their own political ends.
He states that those who choose to hold Bitcoin must like Trump’s aggressive economic policies since they further demonstrate the superiority of Bitcoin over the dollar and other fiat currency.
It is not just Donald Trump’s domestic economic policy that is believed to be encouraging Bitcoin adoption around the world. Many believe that the political instability caused by the ongoing China Trade War, as well as the Iranian nuclear accord are creating the “perfect storm” for people to want to opt out of national currencies in favour of an asset class that is entirely unconnected to national and international politics, such as Bitcoin.
 
Related Reading: Billionaire: Trump & Congress Talking About Bitcoin is Bullish, Not Bearish
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Crypto Execs: Trump’s Bitcoin Quip is the “Biggest Bull Signal” for BTC Ever

Thursday was a crazy day for the Bitcoin (BTC) and crypto industry. Within that span of 24 hours, some of the world’s most powerful individuals commented on the cryptocurrency asset class, tipping their hand as to how governments may address this budding space.
These individuals include Donald Trump, the incumbent United States president; Federal Reserve chairman Jerome Powell; and the Bank of England’s Mark Carney.
Related Reading: Bitcoin (BTC) Ending 2019 Under $40,000 Would Be an “Anomaly”: Why?
While their comments could easily be defined as “negative”, in that hinted that they’re looking to crack down on crypto, commentators are sure that Bitcoin will only benefit from this increased exposure.
Donald Trump Lays Into Bitcoin, Cites Volatility & Privacy
The story of Thursday was undoubtedly the unexpected Twitter thread from Donald Trump on cryptocurrency, which some suspect is not penned by the businessman-turned-president himself.
As reported by NewsBTC earlier, in an impassioned three-part thread, the American leader tried to dismantle the value proposition of not only decentralized cryptocurrencies, like Bitcoin, but Facebook’s Libra too.
Trump quipped that he doesn’t believe that digital assets are money, adding that they are also known to be very volatile and “based on thin air”. Indeed, BTC is volatile due to its status as an early-stage asset, and technically isn’t backed by anything but code and electricity.
The President went on to argue that cryptocurrencies can and do “facilitate unlawful behavior”, citing its use in the drug trade and “other illegal activity”.
After poking the Bitcoin crowd, Trump went on to bash Facebook’s cryptocurrency project, which is also backed by Visa, Paypal, Uber, Spotify, Booking Holdings, and other firms, writing:
“Facebook Libra’s ‘virtual currency’ will have little standing or dependability. If Facebook and other companies want to become a bank, they must seek a new Banking Charter and become subject to all Banking Regulations.”
Trump’s reasoning for bashing Libra is that it throws a wrench into the United States’ de-facto rule to have no other currencies than the U.S. dollar, which is “by far the most dominant currency anywhere in the World.”
Biggest Bull Signal for BTC?
Due to the obvious relevance of the tweet, some of the biggest names in the cryptocurrency space were quick to react to this jaw-dropping tweet from one of the most powerful men on Earth.
Jeremy Allaire, the chief executive of the Goldman Sachs-backed Circle, suggested that Trump’s tweets — yes, tweets — is potentially the “largest bull signal” for Bitcoin of all time.
While this may seem counter-intuitive, as Trump denouncing cryptocurrencies may actually trigger heavy-handed regulation, Allaire explains that this elevates cryptocurrency to the global stage.
No longer is Bitcoin an asset for the fringe. Now, it exists in the mainstream, as more likely than not, this single Twitter thread, exposed to upwards of 68 million Twitter users, will trigger global political and economic discussion on the matter. And by simple virtue of curiosity and the so-called “Lindy Effect”, this space could grow rapidly.

Possibly the largest bull signal for BTC ever. Crypto now a Presidential / Global policy issue. People everywhere will embrace a mix of sovereign and non-sovereign digital currency. https://t.co/PK79wmCddM
— Jeremy Allaire (@jerallaire) July 12, 2019

Brian Armstrong, the chief executive of Coinbase, has added to this discussion. The prominent executive remarks that Trump’s tweet confirms the “four stages” of adoption: getting ignored, getting laughed at, getting fought, and then winning.
The President’s thread is evidently the epitome of the third stage, in that he and his administration were presumably trying to hurt the development of the cryptocurrency space. And with this in mind, many cryptocurrency proponents are hoping that the fourth stage will soon come to fruition.

Achievement unlocked! I dreamt about a sitting U.S. president needing to respond to growing cryptocurrency usage years ago. "First they ignore you, then they laugh at you, then they fight you, then you win”. We just made it to step 3 y'all. https://t.co/N3tzUKELaK
— Brian Armstrong (@brian_armstrong) July 12, 2019

 
Also, some have joked that due to the “left” side of America vehemently going against Trump’s comments on anything and everything, Democrats may begin to adopt Bitcoin to spite the White House.
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Did the US Fed Chairman’s Comments on Libra Cause the Drop in Bitcoin? – Expert Opinion

The following article is the rework of the thoughts put forward by Mati Greenspan, the Senior Market Analyst at eToro.

Bitcoin’s sudden turn in the wake of a bull run after a swift pullback has probably baffled the crypto-community. While ‘Bitcoin’s volatility’ can be blamed for almost all price movements. However, the trigger, in this case, seems to be the US Federal Reserve increased concerns over Libra.
Whether connected or not, we may never know, but the drop in bitcoin yesterday definitely happened on the heels of the Fed Chair’s comments. The purple circle here shows at around 12: 00 hours UTC is the time when the Fed addressed the Libra situation. What followed was a swift drop. Powell said at the Congressional meeting,
“Libra raises serious concerns regarding privacy, money laundering, consumer protection, financial stability”
BTC Price Analysis
Libra announcement came as a positive piece of news for Bitcoin. The supporters of Bitcoin envisioned increased adaptability of Bitcoin with Libra’s launch. So, the Fed’s call for increased oversight certainly has the potential to delay this from happening.
Moreover, correlation does not mean causation, and my personal feeling is that most crypto traders are not exactly watching the Fed testimony for signals of when to buy and sell bitcoin. However, the timing here is more than enough to raise suspicion.
Bitcoin [BTC] Trading Range
Though yesterday’s volatility was a bit harsh, this is the kind of thing that bitcoin traders should be used to already. After failing to breach a new high, the market began very quickly, testing the lower bounds of the current range.
Bitcoin touched a daily low at $11,163; however, it is back above $11,500 at press time. Bitcoin fell from $13,100 as it failed to break above the yearly highs at $13,8000.
Bitcoin Trading Upper Resistance and Support Range
As we’ve stated before, the upper bound is very clearly defined. A breakout above $13,800 (yellow line) would no doubt spur FOMO. However, the bottom of the range is a bit less clear. Various chartists will no doubt identify several key points within the blue box (between $8000-$11,400) that could be named as support.
No doubt, the big one that many will gravitate to is the psychological round number of $10,000 per coin. The momentum will likely shift to the bearish side. Moreover, the lower the Bitcoin price falls, the longer it will stay down.
Do you think Bitcoin will hold above $10,000? Please share your analysis with us. 
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Source: CoinGape

FED Chairman: Libra Cannot Go Forward!

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FED Chairman: Libra Cannot Go Forward!
Federal Reserve Chairman Jerome Powell said that Libra raises serious concerns regarding privacy, money laundering, consumer protection, financial stability, adding that the project “cannot go forward” until Facebook’s answers to regulators’ questions.
FED Chairman: Libra Cannot Go Forward!

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Libra cannot go forward until Facebook addresses serious concerns: Federal Reserve Chair

You’ve been blocked? Less than a month after being formally unveiled, Facebook’s cryptocurrency project has run into its biggest roadblock. Jerome Powell, the Chair of the United States Federal Reserve stated that Libra ‘cannot go forward,’ until serious concerns regarding its working are addressed by the social media giant. Powell, speaking before the US House […]
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Source: AMB Crypto

Ex-Fed Chair Yellen Rants Against Bitcoin: “I Am Not a Fan”

Janet Yellen, former Chair of the Federal Reserve, shared her dislike of Bitcoin in a five-minute speech at CFA Montreal. The ex-central banker mentioned its little transactional volume, connection to terrorist activities as well as money laundering, and inefficiencies for the purpose of processing payments.
Janet Yellen Forgets USD, Tells Financial Analysts Bitcoin is Connected to Terrorism and Money Laundering
A video shared by Francis Pouliot on Twitter showed former Fed Chair Yellen ranting against Bitcoin to a number of attendees at the chartered financial analysts’ meeting CFA Montreal. Pouliot notes:
“Janet Yellen: “I am not a fan of Bitcoin. Let me tell you why”. Former Central-Banker-in-Chief proceeds to meticulous 5-minute rant against Bitcoin, robotically spewing scripted FUD talking points to Finance/Bank VIPs. They’re scared. Buy Bitcoin.”

Janet Yellen: "I am not a fan of Bitcoin. Let me tell you why".
Former Central-Banker-in-Chief proceeds to meticulous 5-minute rant against Bitcoin, robotically spewing scripted FUD talking points to Finance/Bank VIPs.
They're scared. Buy Bitcoin.https://t.co/kEvUlwUZfc
— Francis Pouliot (@francispouliot_) October 30, 2018

As she talked about Bitcoin’s role in money laundering, any CFA with some insight about cryptocurrencies would have realized the same can be said about fiat currency. But the volumes involved in fiat speak volumes about Yellen’s bias against digital currencies.
A report published by data security company CipherTrace concluded that cryptocurrency money laundering is expected to reach $1.5 billion in 2018. The figure is significant only within the digital currency world. Money laundering using fiat currency is another ball game. Danske Bank alone has allegedly laundered $234 billion worth of fiat from 2007 and 2015, an amount that is equivalent to the total market cap of cryptocurrencies.
The United Nations Office on Drugs and Crime has estimated that about two to five percent of global GDP is laundered every year. An amount ranging from $800 billion to $2 trillion in current U.S. dollars. Cryptocurrency money laundering would account to 0.075 – 0.18 percent of that sum. Bitcoin is only one of 2,085 digital coins and tokens available on secondary markets. Its role in money laundering would be even lower.
Yellen also told the audience Bitcoin is not a stable source of value because of its volatility issues.
Its true that the nascent technology has seen a boost in value throughout the years as Bitcoin emerged to the surface, and has just experienced the first full year without gains year-over-year. The instability issue is true to the point that many analysts expect Bitcoin to continue its bullish trend to reach $250,000 (Tim Draper), $280,000 (Tom Waterhouse), and $600,000 (Sam Blackmore).
But it may be only a question of perspective.
It is the BTC/USD rate that is under discussion. Many see the U.S. Dollar as the problem, and in risk of being solved. Lloyd Blankfein, Goldman Sachs CEO, said fiat money is valuable because central authorities force people to use cash. By that logic, if cryptocurrencies do emerge as the mainstream option, fiat currency may meet its end.
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“Cryptocurrencies are great if you are trying to hide or launder money”, says Federal Reserve Chairman

During a testimony before the House of Federal Service Committee on Wednesday, Jerome Powell, the Chairman of the Federal Reserve, the Central Bank of U.S said that cryptocurrencies are great if you are trying to hide money or launder money.

During the testimony, he was questioned on what he thinks about cryptocurrencies. To which, he replied that cryptocurrencies are not big enough a threat for the financial stability. He said that they have to be conscious that they are being used to hide or launder money.

Powell claims that investors invest based on the assets’ price rise whereas there is no promise behind the product. According to him, cryptocurrency is not a currency as they do not have an intrinsic value. There are issues in terms of investor consumer protection as there is significant investment risk associated with cryptocurrencies.

Moreover, the Federal Reserve is not looking at cryptocurrencies. The Chairman’s main concern is that cryptocurrencies do not have a store of value. The basis of currencies is that it is supposed to be a means of payment and a store of value and cryptocurrencies are not used for payments. Usually, people sell their cryptocurrency and then pay in U.S Dollars and in terms of store value, cryptocurrencies have high volatility.

This is not the first time Jerome Powell has shown his disdain towards cryptocurrencies. Last year, during the testimony as a nominee for the Federal Reserve Chairman before the Senate Banking Committee, Powell was asked about his opinion on cryptocurrency and blockchain technology. He pointed out that Bitcoin’s market value is more than that of 29 out of the 500 S&P Corporations in the US.

During the testimony with the Senate Banking Committee, Jerome Powell said:

“Another bubble that is some four or five times the dotcom bubble of the 90s.”

However, Powell had stated that cryptocurrencies don’t really matter as they are not big enough. He said that cryptocurrencies do not have the volume for it to matter and in the “long long run”, cryptocurrencies of that nature could matter.

Moreover, in the month of January 2018, the Federal Reserve chairman speaks about cryptocurrency and blockchain technology. During his speech in Yale Law School, Powell shows interest in blockchain and Bitcoin’s role in distributed ledger technology. He stated that the DLT, in the long run, would render parts of the banking and payment system obsolete. He also adds that there is a need for standardization and interoperability across various versions of distributed ledger technology and a proper legal structure is required for the regulation of the network.

Joshua Fausset, a Youtuber commented:

“What currency in the history of mankind is any better at hiding illegal activity than the US dollar? What currency has been devalued any greater over time than fiat currencies, such as the US dollar? The establishment is living in their own dream world they don’t want to see end. As long as the public stays asleep, the dream will continue.”

WonderfulInflation, another Redditor replied to a comment which stated that the Feds is working in their best interests and not the peoples:

“Regardless of their intention with crypto, the alternative reality we live in is a lot bleaker. The status quo is failing and people won’t realise it as long as new artilces exist claiming Bitcoin is dead. Even for people that aren’t interested in crypto there is a story there.”

He further adds:

“Why is Bitcoin continually dying (showing how fucking hard it is to kill) while banks are too big to fail? On one hand we have someting we try to abuse and destroy (Bitcoin) and on the other we have a leagacy system that refuses to be accountable and claims to be invincible (too big to fail). I wonder which of the two is doing more harm to the world economy.”

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Source: AMB Crypto

US Fed Chairman Maintains Cryptos Don’t Have Intrinsic Value

On Wednesday morning, the U.S. Congress held a hearing regarding cryptocurrencies, hearing mixed opinions from regulators and representatives of the U.S. government.

Federal Reserve Chairman: Cryptos Aren’t A Store of Value Or A Payment Tool

Jerome Powell, the chairman of the U.S. Federal Reserve (Fed), presented his thoughts about the current state of the crypto market while speaking to the House Financial Services Committee this morning.

When questioned about if blockchain-based currencies pose a “serious” threat to financial stability, Powell pointed out that “they aren’t big enough to do that yet.” Although the value of the cryptocurrency market may seem daunting on an individual level, compared to the value of the U.S’ M1 (all circulating cash and checking deposits) figure, cryptocurrencies are rather insignificant.

The Fed chairman also added that the cryptocurrencies are out of the regulatory control of the Fed, and that it isn’t seeking to “provide oversight.” However, despite not having a say over crypto regulation, statements from Powell indicate that the Fed still has an eye on the cryptocurrency industry.

Speaking on the status of cryptos, the governmental figure stated:

“I think there are significant investor risks. Investors, relatively unsophisticated investors, see the asset going up in price and they think ‘this is great I’ll buy this.’ In fact, there is no promise behind that…. So I think there are investor and consumer protection issues as well”

The issue with consumer protection has become a common worry among regulatory bodies. As reported by NewsBTC previously, there are currently over 800 ‘dead’ cryptocurrencies, with many of the 800 being scams that were made to swindle millions of dollars off unsuspecting consumers. It only makes sense that regulators would do everything in their power to remove the presence of fraudulent parties in this space.

The Fed representative later added that he does not believe cryptos should be classified as a currency, noting:

“It’s not really a currency, it doesn’t really have any intrinsic value… Mainly I have concerns. If you think about what currencies do, they’re supposed to be a means of payment and a store of value basically and cryptocurrencies are not used very much in payment… and in terms of the store of value, if you look at the volatility (or lack thereof), it’s just not there.”

Staying in-line with the ‘script’ that regulators seem to stick to, Powell also brought up the issue with pseudonymous/anonymous users using cryptos to launder and smuggle money. He stated:

“They (cryptocurrencies) are very challenging. Cryptocurrencies are great if you are trying to hide money or if you are trying to launder money. So we have to be very cautious and conscious of that.”

But as many crypto proponents have brought attention to in the past, U.S. dollars can, and often are, utilized by criminals as a transfer of value tool.

Cryptos Pullback After Astonishing Run-Up

The past week has been relatively positive for cryptocurrency prices, as Bitcoin ran from $6,200 to a high of $7,500 within the matter of a few days on the back of many pieces of positive news, coupled with stronger technical signals.

However, as the market moved into midday on Wednesday, crypto prices plateaued and took a slight drop, possibly correlating with the harsh stance governmental figures took on this industry.

Many have begun to believe that it is too soon for Bitcoin to continue a run up to $10,000 and beyond, but for now, we will have to wait and see.

 

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