Will BTC soon become the reserve currency in the US?
3 min read
In a hearing on March 3 made himself fed-CEO Jerome Powell strongly in favor of a 0.25 percentage point rate hike in March. However, the high inflation data and a weakening economy continue to give the Fed a headache. It is still completely unclear how many interest rate hikes there will be this year.
Nightmare for the Fed
In the usual calm manner, US Federal Reserve Chairman Jerome Powell answered questions about current central bank policy in front of the US Congress yesterday. However, the 69-year-old lawyer is not to be envied for his job at the moment, as the Fed seems to have maneuvered itself into a quandary. If it doesn’t raise interest rates fast enough, it runs the risk of inflation running too hot. On the other hand, there is a risk that by raising interest rates too quickly, it will plunge the economy into a recession.
In addition, due to the war in Ukraine, energy prices are also increasing enormously. These increased raw material prices not only make heating at home more expensive, but also affect the manufacturing industry, especially the food industry (keyword: rising fertilizer prices). Ultimately, this mixed situation could result in the inflationary spiral accelerating.
Jerome Powell, however, sees it differently. As he told the US Congress, he expects inflation to peak soon and “reduce” by the end of this year.
In January, U.S. inflation was up a whopping 7.5 percent yoy – BTC-ECHO reported. After the Fed had previously announced a much tighter monetary policy from March, the market praised an even faster and tighter action by the Fed after these record inflation data. The US Investment Bank JPMorgan meanwhile, even expects the US Federal Reserve to raise interest rates for nine consecutive meetings.
“More than a reserve currency”
One comment, however, caused a stir. In his speech, the 69-year-old emphasized that there could be more than one reserve currency besides the US dollar. He then added that there were times when that was the case (see tweet below).
It remains unclear whether the US Federal Reserve Chairman is thinking of BTC, gold or another fiat currency. However, the statement was celebrated among so-called “BTC maximalists”., as if it were already a “yes” for BTC. The well-known crypto investor and media star Anthony Pompliano – Pompliano for short – wrote on Twitter that this had happened faster than he had expected (see tweet below).
At the same time, Powell reminded of the need for regulation in the crypto space.
We’re dealing with an emerging industry here, made up of many parts, and there isn’t the kind of regulatory framework that there should be. (The Ukraine-Russia conflict) has underscored the need for congressional action in the area of digital finance, including cryptocurrencies.
Jerome Powell, source: CNBC
Even if Powell’s statement made waves in the crypto space, it seems unlikely against the background of the criticism that Powell was referring to BTC.
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