The Federal Reserve's new chairman made his stance on cryptocurrency clear to the US House of Representatives on Wednesday. In his view, cryptocurrencies have no intrinsic value, are not used often as a means of payment, are not a store of value, but are great for money laundering. He also dismisses the idea that cryptocurrencies could pose a significant risk to the country's financial stability at their current size.
The chairman of the U.S. Federal Reserve who took office in February, Jerome Powell, answered questions about cryptocurrencies in his testimony before the House Financial Services Committee on Wednesday.
This committee has jurisdiction over issues pertaining to the U.S. economy, banking system, housing, insurance, securities, exchanges, monetary policy, international finance, international monetary organizations, and efforts to combat terrorist financing.
U.S. Representative and vice-chairman of the committee, Patrick T. Mchenry, asked Powell to outline his thinking on cryptocurrencies. The chairman replied that there are "significant" risks to "relatively unsophisticated investors" who "see the asset going up in price and they think this is great; I'll buy this [but] in fact there is no promise behind that." He elaborated:
Cryptocurrencies are great if you're trying to hide money or if you're trying to launder money…it doesn't really have any intrinsic value so I think there're investor or consumer protection issues as well.