Did The Chairman Of The US Federal Reserve Just Compare Bitcoins To Gold?

By Rishma Banerjee

The popularity of cryptocurrencies, especially that of bitcoin has grown by leaps and bounds, these last few years. Though it can’t be said that Bitcoin has finally succeeded due to its highly volatile market price, it is indeed a huge compliment for the bitcoin industry when people like the U.S Federal Reserve Chairman, Jesse Powell begins to speak favourably about the cryptocurrency’s chances of becoming an alternative to gold.

In his testimony before the U.S Senate Banking Committee on Thursday, the Fed Chairman who initially had been talking about Facebook’s Libra project was questioned whether this unprecedented rise in the popularity of the cryptocurrency system that is being seen throughout the globe will be able to impact the importance or the need for a reserve currency.

Powell replied,

“In the traditional sense, things like that are possible, but we really haven’t seen them, we haven’t seen widespread adoption.”

When asked about Bitcoin, he said,

“It’s a good example, really no one uses Bitcoin for payments. They use it more as an alternative to gold. It’s a store of value; it’s a speculative store of value like gold… People have been talking about this since cryptocurrency emerged, but we haven’t seen it. But that’s not to say we won’t see it. And if we do see it, yes you could see a return to an era in the United States where he had so many currencies — in the national banking era.”

Being the head of the global reserve currency, the U.S Dollar, his comments do hold an incredible amount of weight. This might even be considered as the perfect validation for many Bitcoin enthusiasts. Gold at the moment a $7+ trillion asset with 5,000+ years of history and while Bitcoin is still a $200 billion asset with just ten years of history.