202 Interactions, 4 today
Economic gatekeepers are taking a closer look at blockchain as mainstream coverage of the Bitcoin bubble and Coinbase listing intensifies.
Finance authorities on all sides of the globe are seizing the chance to question the worth and usefulness of cryptocurrencies as public attention shifts to the room in the aftermath of Coinbase’s direct listing on the Nasdaq.
Bank of Korea governor Lee Ju-yeol said cryptocurrencies had “considerable limitations” as a method of payment, following a monetary policy meeting on Thursday, reports local outlet KBS World.
Although admitting that it was difficult to reliably value cryptocurrencies due to their unpredictable market volatility, Lee stated that the BOK had not changed its position that they had no intrinsic value.
Lee also mentioned United States Federal Reserve Chairman Jerome Powell, mentioning that the Fed’s chairman expressed his views on the crypto room.
Powell had earlier claimed in a virtual interview with The Economic Club of New York that cryptocurrencies were merely speculative, noting that they had not been widely accepted as a form of payment.
“They’re really vehicles for speculation. They’re not really being actively used as payments,” Powell said, according to CNBC.
The latest acceptance of bitcoin by big global payment processors contradicts Powell and Lee’s remarks. In recent months, Visa, Mastercard, and PayPal have all begun to adopt crypto payment solutions, while Tesla has launched Bitcoin (BTC) as a payment method for its electric car company.
That is not to suggest that Bitcoin and other cryptocurrencies are a sure bet when it comes to payment methods. Owing to the small block size and resulting network congestion, Bitcoin’s total transaction cost is actually around $30. As a result, payment providers are often required to accept such processing costs as a cost of doing business before they can no longer do so, as was the case for gaming app Steam in 2017.
Powell and the cryptocurrency group agree on one point: cryptocurrency should be likened to gold — though for very different purposes. Proponents of cryptocurrency (particularly Bitcoin) argue that the technology should be used as a long-term store of value in the same way as precious metals are.
Powell, on the other hand, meant the analogy to be mocking. The Fed chairman’s view of gold seems to be little different than his view of cryptocurrencies.
“For thousands of years, humans have given gold a special value that it does not have,” said the chairman of the United States’ fiat-printing centre.