St. Louis Fed President: Cryptocurrencies do not require a special approach

Speaking at the Consensus 2018 event in New York, James Bullard explained that digital currencies operate as non-uniform currencies, as there are over 1,800 cryptocurrencies, many of which trade at different prices on the same local markets.

The President of the Federal Reserve Bank reminds that such non-uniform fiat currencies have historically been rejected and replaced in financial markets. 

“Everyone should compete on a level playing field... welcome to the cryptocurrency competition game,” Bullard said. 

He also noted that the US dollar is currently one of the biggest competitors to cryptocurrencies.

“Cryptocurrencies often move in the wrong direction when trying to solve an important social problem - facilitating exchange in the market,” Bullard said. The dollar, on the other hand, is supported by a stable government with direct and clear monetary policy and low inflation. That is why today it better meets the needs of the economic market.

“The dollar is in excellent condition and will remain so because it has been a winner for a long time,” the banker said. “Unless we screw things up ourselves, I think the dollar will remain the dominant currency for now. Cryptocurrencies, however, can help us avoid the Venezuelan type of monetary policy.”