News Fed Chair Nominee Powell Testifies On Bitcoin & Blockchain...

Fed Chair Nominee Powell Testifies On Bitcoin & Blockchain Technology

-

- Advertisment -

November 28, 2017 10:25 PM

Earlier today, Jerome Powell testified before the Senate Banking Committee, an early step in the process to his confirmation as chair of the Federal Reserve. Cryptocurrency is “not big enough” to matter just yet, said Powell, but he signaled interest in blockchain technology, possibly applied to wholesale payments systems.

On November 28, 2017, President Trump’s nominee for chair of the Federal Reserve, Jerome Powell, testified before the Senate Banking Committee. If confirmed by the Senate, Powell, who has served as a member of the Board of Governors of the Federal Reserve System since 2012, would assume the place of current chair Janet Yellen, the first woman to lead the Fed. Yellen’s term ends February 3, 2018.

After inquiring about how Powell hopes to restructure the nation’s balance sheet, Senator David Perdue (R-GA) switched gears to discuss blockchain technology and cryptocurrency.

“It’s a little bit off the wall, but I’m beginning to be very concerned that we have another bubble that is some four or five times the size of the dotcom bubble in the late 90s. And that has to do with the cryptocurrencies, like bitcoin,” said Senator Perdue. “Bitcoin’s market value now is bigger than all but 29 of the S&P 500 corporations in America,” he added, before asking how the continued growth and usage of cryptocurrency could impact the efficacy and tools of the Fed’s monetary policy.

A measured Powell answered, “In the long, long run, things – cryptocurrencies – of that nature could matter. They don’t really matter today. They’re just not big enough. There isn’t anywhere near close to enough volume for it to matter.”

Indeed, it’s difficult to ascertain exactly how much capital has flowed into the cryptocurrency world. When one examines exchanges without transaction fees, it’s quite possible that volumes are artificially inflated. For now, the greatest concentration of value is easily in bitcoin ($168 billion) and Ethereum ($45 billion). Together, they account for nearly 70 percent of the entire cryptocurrency market cap ($312 billion).

“That was the problem with dotcom bubble, too, on a different level,” interjected Senator Perdue. “There were so few entities and there was so much money interested in chasing it and that’s what happening now in the bitcoin area,” he said, possibly in reference to the 21 million unit issuance cap on bitcoin. “The growth of [the dotcom bubble] was much, much faster than anybody thought at that time, too, in the late 90s,” Senator Perdue added.

 Powell replied carefully. “Yes, there’s no question the valuations have really gone up quite a lot in the last year or so. I don’t have a view on the appropriate level of valuation, of course. Again, from our standpoint, cryptocurrencies are something we monitor very carefully. We actually look at blockchain as something that may have significant applications in the wholesale payments part of the economy, something we pay close attention to.”

Perdue queried, “So you’re watching what Alibaba’s doing in Asia today, relative to blockchain technology?”

Powell said, “We’re watching all of those technologies. It’s something we have to do, I think. And it’s something that’s actually kind of enjoyable and interesting to do.”

With regard to conventional monetary policy, Powell said he expects the Fed will continue to gradually increase interest rates.

Matthew is a writer with a passion for emerging technology. Prior to joining ETHNews, he interned for the U.S. Securities and Exchange Commission as well as the OECD. He graduated cum laude from Georgetown University where he studied international economics. In his spare time, Matthew loves playing basketball and listening to podcasts. He currently lives in Los Angeles. Matthew is a full-time staff writer for ETHNews.

ETHNews is commited to its Editorial Policy

Like what you read? Follow us on Twitter @ETHNews_ to receive the latest Federal Reserve, Jerome Powell or other Ethereum law and legislation news.



Source link

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest news

Mercuriex Cryptocurrency Exchange Launches New Utility Token, SURF

MercuriEx Cryptocurrency Exchange, originally developed in 2017, came under new ownership in December 2019. Since taking over the exchange,...

Fungibility: Bitcoin Mixers Favorite Term That No One Understands

Fungibility, perhaps the most important concept when dealing with a decentralized and anonymous currency, but does bitcoin...

Crypto can’t thrive in the real world – but stablecoins can

We can safely say that the hype about cryptocurrencies is pretty much over. The claims of Bitcoin...

How to double your crypto

Most of us have a small gambler deep inside our souls. We love to feel the thrill...
- Advertisement -Fed Chair Nominee Powell Testifies On Bitcoin & Blockchain Technology

Cryptocurrency Top Security Risk Concerns: What You Can Do to Protect Your Crypto

A report by CipherTrace revealed that in the first half of 2019, criminals and fraudsters stole more...

How has Bitcoin of America Changed the Cryptocurrency Industry?

Who is Bitcoin of America? Bitcoin of America is a U.S. based digital currency...

Must read

Mercuriex Cryptocurrency Exchange Launches New Utility Token, SURF

MercuriEx Cryptocurrency Exchange, originally developed in 2017, came...

Fungibility: Bitcoin Mixers Favorite Term That No One Understands

Fungibility, perhaps the most important concept when...
- Advertisement -Fed Chair Nominee Powell Testifies On Bitcoin & Blockchain TechnologyFed Chair Nominee Powell Testifies On Bitcoin & Blockchain Technology

You might also likeRELATED
Recommended to you