Congress of the United States: Central Bank's Cryptocurrency is "One of the Worst Financial Ideas"
The Subcommittee of the United States of America specializing in monetary policy and trade, discussed the main issues related to cryptocurrencies. The hearing, which was titled as "The Future of Money: Cryptoсurrency," was geared toward the global deployment of digital assets in the future.
During the hearing, issues related to the development of digital assets were discussed. In particular, the topic of the need to create a cryptocurrency by the central bank was raised. Speaking about this, Rodney Garratt, who is professor of economics at the University of California at Santa Barbara, said that banks should determine whether they want to completely abandon the provision of payment devices to the general public or whether it is more appropriate to adopt one of the types of digital alternatives.
Alex Pollock, a senior research fellow, stated the following:
“to have a central bank digital currency is one of the worst financial ideas of recent times, but still it’s quite conceivable...”
Pollock noted that the central bank's cryptocurrencies will increase the size, role and authority of the banking organization. He also added that the Federal Reserve System, which will use the Central Bank's cryptocurrency, may lead to it acting as the overwhelming credit distributor of the economic and financial system of the United States of America.
Alex Pollock explained that if the money is fully digitized, then their character will not be changed or issued by the central bank. In this case, the currency will not be private, at the Bitcoin level.
At a time when the chairman of the subcommittee, Andy Barr asked if cryptocurrency could replace cash, Garratt replied:
"From the point of view of the concept, cryptocurrencies today are quite profitable. However, they can not work effectively in terms of exchange. This is due to their volatility. The expert suggested that the level of volatility may begin to decline if the adoption rate increases. Thus, users should increase the number of transactions with cryptocurrency."
Director of the Center for Data Analysis in the Heritage Foundation, Norbert Michel, also expressed her opinion on this issue. He said that the capital gains tax is a big obstacle. This is explained by the complexity in the process of tracking profits and losses.
Norbert Michel also noted the importance of a prudent regulatory approach. He suggests that financial regulators shouldn't use strict rules for cryptocurrency just because it can be an instrument of illegal activity. Including money laundering.
"Yes it is true that criminals have used bitcoin, but it's also true that criminals have used airplanes, computers, and automobiles. We shouldn't criminalize any of those instruments simply because criminals used them."
During the dialogues, the statement was made by Congressman Brad Sherman. He expressed extremely critical position regarding the cryptocurrency. In his speech, he said that he would prefer that people in the United States of America have no right to buy, sell or extract digital assets.