Jerome Powell: Bitcoin threatens gold more than the US dollar - Kakiforex | Forex markets for the smart money. Jerome Powell: Bitcoin threatens gold more than the US dollar Jerome Powell: Bitcoin threatens gold more than the US dollar

March 30, 2021

Jerome Powell: Bitcoin threatens gold more than the US dollar

 The number one cryptocurrency in the world is again growing in price and is once again approaching its local and absolute highs, which are around the level of $ 62.5 thousand. We have already said earlier that we expect a strong correction in the area of $ 43-44 thousand. However, since the price failed to overcome the Kijun-sen line, the downward movement is canceled for the time being. But recently, representatives of the Federal Reserve quite often comment on bitcoin and its prospects. Naturally, the Fed's comments are extremely important, since it is the Fed that can influence the future of "digital gold" very much. For example, by completely banning it. It is clear that so far we are not talking about such radical measures. However, no one knows what will happen in a year or two. We have repeatedly said that for any government and any central bank, cryptocurrencies are a "bone in the throat". Thus, the Fed and other central banks may start a war against bitcoin in the future. But so far, this is out of the question. Moreover, Jerome Powell is calm on this issue. Last week, the head of the Federal Reserve said at a conference of the Bank for International Settlements that bitcoin lacks many properties for it to become a useful and full-fledged currency. Powell noted that bitcoin, like other tokens, is extremely unstable, so it is impossible to use them as a means of saving. Transactions, according to Powell, are more like speculation, since cryptocurrencies are not secured by anything. Jerome believes that cryptocurrencies can replace gold rather than the fiat dollar. Regarding stablecoins, Powell slightly softened his opinion, which he voiced earlier. Now Powell believes that stablecoins are more advanced cryptocurrencies that are tied to real money, so they are more stable and reliable. However, according to the head of the Federal Reserve, stablecoins will still not become a means of payment in the new international monetary system. At the end of his speech, Powell again noted that the Fed will not rush to create a digital dollar and will first study all aspects of this implementation.

However, not all countries of the world are so loyal to cryptocurrencies. For example, South Korea has introduced legislation that will prevent money laundering using cryptocurrencies. Now, providers of services related to cryptocurrency assets will have to register with government authorities before starting their activities and will have to report all suspicious transactions, as well as verify the identity of their customers. Earlier, the South Korean government introduced legislation that taxes capital gains from transactions with bitcoin and other tokens. Simply put, if you live in South Korea, bought bitcoin and it has doubled in price, you will have to pay income tax. In 2020, the South Korean government fully legalized cryptocurrency trading, storage, and mining. Thus, as we can see, Seoul has taken the path of legalizing cryptocurrencies, but at the same time with the benefit for itself, for the state.

Meanwhile, in India, several cryptocurrency exchanges have asked the Reserve Bank of India not to impose a complete ban on mining, storage, and operations with cryptocurrencies. According to representatives of crypto exchanges, this will cause financial losses throughout the country. They offer an effective mechanism for regulating the sphere of cryptocurrencies, which is already used in many countries around the world. The reaction of the Indian authorities to this request is still unknown. Recall that India is on the verge of a complete ban on cryptocurrencies and the introduction of criminal liability for their use.