St. Louis Fed president says Bitcoin will threaten US Dollar

The head of the St. Louis Fed has spoken positively about Bitcoin.

The leading US policymaker also says the top cryptocurrency could be a potential “threat” to the US dollar.

During an interview with CNBC from the Consensus 2018 conference in New York, St. Louis Fed president James Bullard spoke highly of positive aspects of cryptocurrency.

Bullard says one of these advantages revolves around cutting costs in trade.

He states that cryptocurrencies are “facilitating trade that would not otherwise occur. Some of that’s illegal, but some of that is avoiding costs that would otherwise be there.”

When asked if Bitcoin is a threat to the US dollar, Mr. Bullard asserted uncertainty about the possible competition the leading digital currency could pose, saying:

“I don’t think so at this point […]. We don’t know how the future’s going to unfold.”

“My idea is that there’s a lot of currency competition going on right now.”

The St. Louis Fed chief added, however, that topping the dollar’s supremacy would be tough, adding:

The St. Louis Fed chief added, however, that topping the dollar’s supremacy would be tough, adding:

“The dollar has been the winner historically because it’s backed by the largest economy and a relatively stable policy in terms of low inflation and that’s going to be tough to beat.

“But a lot of people here want to beat it.”

Bullard was much more openly bullish on the topic of Blockchain, saying:

“we think blockchain technology is very interesting [..] we want to be very engaged and thoughtful as this proceeds.”

He also answered a question of whether the Fed was contemplating its own cryptocurrency, saying:

“We can certainly look at that as a possibility.

“And there are different parts of the Fed that look at all kinds of applications of blockchain technology.

“But I wouldn’t say there’s any plan at this point.”

The statement continues the leaning of general cryptocurrency backing from the St. Louis Fed.

In January this year, the reserve bank issued a devoted paper entitled “A Short Introduction to the World of Cryptocurrencies.”

In which, its research forecasts that it is “likely” that Bitcoin and altcoins will “emerge as their own asset class.”