Bitcoin and other cryptocurrencies cannot replace the U.S. dollar because they fail the basic test of what a currency should be. That’s what John Williams, the incoming head of the Federal Reserve Bank of New York, insists.
“Cryptocurrency doesn’t pass the basic test of what a currency should be,” Williams said on April 20, as reported by CNBC. “[Currency is] basically something with a store of value [and bitcoin is not that].”
Williams, who’s currently president of the Federal Reserve Bank of San Francisco, is the presumptive next president of the Federal Reserve Bank of New York. The crypto-skeptic slammed virtual currencies, saying they can never replace paper money because they are riddled with problems.
Williams: Crypto Fraud Is A Problem
“The setup or institutional arrangement around bitcoin and other cryptocurrencies [is problematic],” Williams said. “First of all, they have problems with fraud, problems with money-laundering and terror financing. There’s a lot of problems there.”
Williams also took issue with the erratic price movements of cryptocurrencies, saying the volatility makes them an unstable store of value and hampers their ability to be used as reliable payments for goods and services.
John Williams’ bearish stance differs from the sentiments of his boss, Federal Reserve Chairman Jerome Powell, who urged caution but is not a crypto-bear, as CCN.com has reported.
“[I have] nothing against bitcoin,” Powell said in November 2017. “We generally look at some of the risks of cryptocurrencies associated with money-laundering and those sorts of issues, but we’re not broadly opposed or supportive of alternative currencies.”
John Williams made the remarks just as BTC prices enjoyed a post-Tax Day rally, as presaged by Fundstrat co-founder Tom Lee, who predicted that bitcoin prices would spike after Tax Day passed in the United States. And that’s exactly what happened.
Jack Dorsey: Bitcoin Will Be Single Currency
Williams’ dismal outlook also diverges sharply from bitcoin bulls such as Twitter billionaire Jack Dorsey. Dorsey believes BTC will ultimately emerge as the world’s single currency and will replace all other fiat money.
Similarly, avowed crypto bull Tim Draper has no doubt about its future. Draper has set a $250,000 bitcoin price target for 2022, and he’s undeterred in his optimistic outlook for virtual currencies.
“I’m thinking $250,000 a bitcoin by 2022,” Draper boldly declared. “Believe it. They’re going to think you’re crazy, but believe it. It’s happening and it’s going to be awesome!”
Draper also predicts that blockchain will disrupt and transform finance, healthcare, and many other industries. “It’s honest, it’s straightforward, it’s incorruptible, and it’s fair,” he said. “The blockchain is one of the most transformational technologies that has happened in the history of the world.”
Featured image from Youtube/John Williams Fed Reserve.