Fed Chairman Powell Testifies Says Cryptos have No Intrinsic Value

Nilesh Maurya
July 19, 2018
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All eyes were on Fed Chairman as he began testifying in front of Senators regarding cryptocurrencies. Powell, who is not a big fan of cryptocurrencies, continued to maintain his stance as he mentioned that cryptocurrencies dint has any intrinsic value and not big enough to create financial stability risks.

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Powell’s stance on cryptocurrency

Powell who gave a statement to senators on day two of

“The Semiannual Monetary Policy Report to the Congress” in an open hearing before the Congress said that “relatively unsophisticated investors see the asset go up in price, and they think: ‘This is great; I’ll buy this.’ In fact, there is no promise of that.”

He also went on to say that cryptocurrencies are not real currencies because they have no intrinsic value.

According to Mr. Powell currencies have two primary functions which are that they are means of payments and they are a store of value. According to him, cryptocurrencies have neither as of today they are not really used for payments, as people still sell their cryptocurrencies and pay in dollars and in terms of the store of value, the volatility of it prices don’t let it establish one.

“There are investor and consumer protection issues as well,” Powell said in front of the House Financial Services Committee. He also mentioned that Cryptocurrencies are great if you are trying to hide money or launder money and that there are significant investment risks for people who invest in them.

His statement also included that US Fed Reserve is not looking into issuing its own digital currency and do not have the regulatory authority to deal with cryptocurrencies.

Also, read: Bitcoin ETF Enthusiasm Exploding, Bulls have Already Taken the Charge

Powell not a big fan of cryptos

This was not the first time Powell spoke against cryptocurrencies. He has also previously testified against cryptocurrencies. Powell previously commented on crypto last November, when he said that a drop in cryptocurrency assets would not destabilize an economy.

He added, however, that

“in the long, long run, cryptocurrencies and things of that nature could matter,” adding that blockchain — bitcoin’s underlying technology — could be something that “may have significant applications in the wholesale payments part of the economy.”

Mr. Powell’s comments do dampen the sentiment towards cryptocurrencies as worlds largest economy turns its back towards cryptocurrencies. There will soon be a range of debates on this statement in days to come and hopefully will change Mr. Powell’s stance on cryptocurrencies at least towards regulating them.

Will US Fed change its stance ever on cryptos? Do let us know your views on the same.

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Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.

Why Trust CoinGape

CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

About Author
About Author
Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Follow him on X at @KoinKing1 or connect with me on linkedin.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.