It’s a common trend now for those involved with finance to downplay the potential of cryptocurrencies. For example, Nouriel Roubini consistently rants about the sector on Twitter, which isn’t surprising when you consider that he has received millions from banks and governments.
It appears as though the New York Federal Reserve is the latest entity to downplay cryptocurrencies. This is the conclusion made from a research paper which states that the dollar is “not threatened” by the sector at all.
About The Research
The conclusion isn’t that surprising, considering that there is no reason for the New York Federal Reserve to champion cryptocurrency, as it relies on the strength of fiat currency (the U.S. dollar). John Williams, who is the current president and chief executive officer of the New York Federal Reserve, has previously been vocal about his thoughts that cryptocurrency “doesn’t pass the basic test of what a cryptocurrency should be.”
While the paper does recognize that there are new challenges to the U.S. dollar, such as China – it concludes that cryptocurrency will not be replacing fiat currency anytime soon. However, it’s important to note that throughout history, there have been companies and organizations – such as tobacco companies – that have gone out of their way to make sure that their findings support a certain agenda.
While the New York Federal Reserve might have an agenda, there is something to be said from the fact that some of the most influential individuals are interested in the space. There have been multiple times that cryptocurrencies have been brought up on the Joe Rogan podcast, which often has more viewers/listeners than many TV stations.
It’s not as if there aren’t respected organizations that see the value in the cryptocurrency sector. Specifically, the World Trade Organization published a paper last year suggesting that there is massive potential for cryptocurrencies to change the global payments sector. Christine Lagarde, the managing director of the International Monetary Fund, has suggested that state banks should issue state-backed cryptocurrencies, as well.