The Federal Reserve has never been to fond of cryptocurrencies.
When it comes to modern financial crime and money laundering and the many resources invested in combating the threat, we can never have enough information.
During an appearance before the US Congress, Jerome Powell, the chairman of the Federal Reserve took a very direct and strong approach regarding cryptocurrencies.
He took the opportunity to dissuade potential investors from crypto by saying that he’s concerned about the “obvious” crypto bubble. As other issues he addressed, were the huge volatility regarding the price, the lack of usage as a means of payment and the inability to be called a store of value.
He concluded by saying that, “Cryptocurrencies are great in laundering and hiding money.”
The Federal Reserve’s claims are beyond questionable
Now the points mentioned can be put to serious questioning when analysed carefully.
The US Federal Reserve complaining about potential bubbles is like Santa complaining about presents. By pushing down interest rates to unbelievably low levels, the Federal Reserve creates billions of dollars out of thin air.
Businesses tied to real estate will without a doubt welcome low interest rates since they will be extremely beneficial to their development. This is without a doubt bad for the hosting country’s economy. The bubbles created by the Federal Reserve always pave the way to recession.
It’s also very obvious that the Federal Reserve will acknowledge the issue of cryptocurrency volatility. Cryptocurrencies do not promote or sell a product or employ millions of workers. All the while they are a global wide phenomenon and governments are still struggling on questions about regulation and the industry in general. This allows for easy market manipulation and increased volatility.
On the issue of money laundering and asset hiding it’s important to note that fiat money isn’t exactly secure on the subject. While the potential for modern financial crime is great in the still developing world, it’s important to note that there are also many strict measures taken to ensure this sort of crime doesn’t evolve and spread to everyday crypto users.
To put a more realistic perspective on things, it’s very important for people to know that the Federal Reserve is not “federal” and is not tied to the US government in any way. The Federal Reserve is not required to follow the Freedom of Information act and has more power over the economy, than the democratically elected government. In a way it’s entirely a private corporation which owns the US economy.
These facts alone make the statements by Powell prone to questioning. Young investors should always keep an eye out on a potential solution to escape the endless money printing by the Federal Reserve.
You can also check out:
- Who Stands Against Real Economic Progress?
- Mainstream Cryptocurrency?
- Bitcoin Casinos and the Online Betting Industry.
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