In an odd convergence, a sworn protector of the fiat currency regime, St. Louis Fed president James Bullard is presenting on the topic of cryptocurrencies, or rather "Non-Uniform Currencies and Exchange Rate Chaos" at the blockchain tech conference in New York.
Bullard notes that while he is "a fan of technological innovation as a driver of economic growth, and blockchain and related technologies are promising", he is far less enthused by the concept of cryptocurrencies, for an obvious reason: cryptocurrencies, unlike fiat, are not created by any central bank; cryptocurrencies, like fiat, are only worth whatever someone believes they are worth.
In other words, in a time when central bankers are losing credibility by the day, there is no a legitimate platform to express this loss of faith, i.e. by purchasing bitcoin and other cryptos. Which is also why central banks are doing everything in their power to suppress the rise of cryptos, just as they did the same to gold several years ago.
Predictably, Bullard's conclusion is hardly crypto-friendly: 'Cryptocurrencies may unwittingly be pushing in the wrong direction in trying to solve an important social problem, which is how best to facilitate market-based exchange."
Actually, cryptocurrencies are very wittingly pushing in the direction of solving the biggest social problem of the past hundred years: the existence of central banks, and how to finally eliminate them.
Which explains the chronic resistance of central banks, policymakers, politicians, commercial banks and their assorted lackeys, in doing everything in their power to preserve the status quo.
Courtesy of the St. Louis Fed, here are some of the key slides:
Bullard: “Cryptocurrencies are creating drift toward a non-uniform currency in the U.S., a state of affairs that has existed historically but was disliked and eventually replaced.” https://t.co/AyVjUWU6xJ pic.twitter.com/aH3KQCdd4J— St. Louis Fed (@stlouisfed) May 14, 2018
Bullard: “Currencies have to be reliable and hold their value. This is probably why government backing has been important historically, combined with a stable monetary policy that promotes stability of the currency.” https://t.co/WwpyBO0Amx pic.twitter.com/o0NHDnDGH8— St. Louis Fed (@stlouisfed) May 14, 2018
Bullard says that “the current cryptocurrency wave may be driving the U.S. uniform currency system toward something more like the international non-uniform currency system,” which is characterized by volatile exchange rates https://t.co/Ujl8faIY2m pic.twitter.com/F2WXTnNGYj— St. Louis Fed (@stlouisfed) May 14, 2018
“Cryptocurrencies may unwittingly be pushing in the wrong direction in trying to solve an important social problem, which is how best to facilitate market-based exchange,” Bullard says https://t.co/D6G2K64Dbx pic.twitter.com/n8INYTkxrt— St. Louis Fed (@stlouisfed) May 14, 2018
The Bullard Q&A can be seen live in the feed below:
LIVE: Fed's Bullard Speaks on Blockchain at Consensus https://t.co/LKhljdYfa7— Bloomberg (@business) May 14, 2018
And the whole presentation can be read here (pdf link)