Cryptocurrency Is Causing A Shift In The Way The US Financial System Deals With Illegal Activity
- Cryptocurrency could pose a risk to the current financial system, according to the president of the Federal Reserve.
- Comments this month from a federal chairman indicated that Libra would not be able to operate in the US without addressing certain concerns.
One of the biggest concerns for the cryptocurrency industry has been the potential impact it can have on traditional finance. This concern has been well voiced by opponents of the industry, though recent comments from the St. Louis Federal Reserve President James Bullard have taken these concerns a little further. According to a report from Reuters, cryptocurrencies could be impacting the currency system in a way that causes price instability and creates more opportunities for illegal activity.
— St. Louis Fed (@stlouisfed) July 19, 2019
In the statement, which was part of a presentation at an academic conference, Bullard stated,
“The current situation could be described as a drift toward a non-uniform currency in the U.S. One suspects that consumers and businesses will not like a non-uniform currency in which many types of currency trade simultaneously at a variety of prices in a local market.”
Even though more than one currency could realistically exist and lead to voluntary transactions, Bullard added that some of these transactions aren’t exactly legal. Cryptocurrency can inherently move “in the wrong direction,” even though they were created with the intention of solving issues in the financial industry.
The comments come at the same time that regulators are attempting to deal with many new digital assets that are being used to raise funds in the business, though there are other purposes as well. Jerome Powell, the Federal Chairman, commented this month that the only way that Libra will be able to progress in the United States will be by addressing major concerns that the government has.
Brad Sherman, a US lawmaker, recently commented that Bitcoin is as big of a threat to the safety of the United States as the horrific events that took place on 9/11. In response, Mati Greenspan took to Twitter by saying that the government presently has a monopoly on money, alleging that anything threatening the current monopoly should be a criminal offense.
Sherman: The federal government has a monopoly on the creation of money and anything that threatens this monopoly should be made illegal.
— Mati Greenspan (@MatiGreenspan) July 18, 2019
Meltem Demirors, the Chief Strategy Officer of CoinShares, recently testified in front of the House, saying that Bitcoin is much different from Libra and that cryptocurrency isn’t going anywhere.