Former New York Federal Reserve Bank President: The establishment of a Bitcoin reserve by the U.S. is not good for the government and those who do not hold BTC.

Former New York Federal Reserve Bank President Bill Dudley recently stated that the establishment of a Bitcoin reserve by the United States actually offers no benefits to the government and those who do not own Bitcoin. (Background: Trump nominated Basent as Secretary of the Treasury, what is his stance on cryptocurrencies, does he support a Bitcoin reserve?) (Additional context: The cryptocurrency advisory committee set up by Trump will assist in establishing a U.S. Bitcoin reserve) According to CoinGecko data, since Trump won the U.S. election, Bitcoin has surged 31.6% in nearly one month, reaching a peak of over $100,000 on December 5, at $104,056, surpassing the market capitalization of Saudi Aramco to become the seventh largest asset globally. Bitcoin trend. Source: CoinGecko Former New York Federal Reserve Bank President: Establishing a Bitcoin reserve offers no benefits However, former New York Federal Reserve Bank President and former Vice Chairman of the Federal Open Market Committee Bill Dudley responded yesterday (6) in a Bloomberg report that part of the recent rise in Bitcoin is due to the potential for the U.S. to establish a Bitcoin reserve after Trump's inauguration, but he believes that establishing a Bitcoin reserve in the U.S. actually offers no benefits. Advantages of Bitcoin First, Dudley affirmed the positive attributes of Bitcoin. He believes Bitcoin has convenience, meaning that regardless of the price of Bitcoin, holders can carry it on a single USB drive. Second, Bitcoin also has semi-anonymity, allowing holders to transfer and use it for transactions without revealing any identity information, without relying on any third-party institutions. Additionally, Bitcoin itself can resist inflation. This is because the issuance of Bitcoin is designed to be 21 million coins, meaning higher prices will not lead to more supply, while larger demand will push Bitcoin to higher prices. Establishing a Bitcoin reserve offers no benefits However, even with the above advantages, Dudley believes that establishing a Bitcoin reserve offers no benefits for the government or those who do not own Bitcoin: There is no exit strategy because its purpose is to drive up inflation, not to create value for the government. The government will be forced to hold volatile tokens that do not generate any income. To provide purchasing funds, the Treasury must either borrow (which will increase debt costs) or the Fed needs to print more dollars (which will exacerbate inflation). The latter is almost indistinguishable from the Fed monetizing U.S. government debt. Further reading: Should the U.S. buy 1 million BTC in 5 years? Senator Lummis' Bitcoin reserve bill has been introduced, where will the funding come from? Trump should formulate safe regulations However, in the end, Dudley still suggested that if Trump truly wants to support the development of the cryptocurrency industry, he needs to establish a set of laws and regulations that allow cryptocurrencies to develop and operate safely. Dudley stated: For example, ensuring that stablecoins are fully backed by Fed deposits or short-term government bonds. Defining through legislation whether tokens are currency or securities, and who should regulate them. Establishing rules to protect consumers and prohibiting their use for terrorism financing or illegal drug sales. Cryptographic technology has the potential to improve the financial system, such as allowing people to conduct financial transactions more easily and at lower costs. However, without strong safeguards, fraud and abuse will continue to exist, undermining the trust needed to establish such benefits. Related reports Tether is cash-rich! USDT Q2 net profit of $1 billion, Bitcoin reserves rise to $1.67 billion Should the U.S. buy 1 million BTC in 5 years? Senator Lummis' Bitcoin reserve bill has been introduced, where will the funding come from? Tron transfers $100 million to 'purchase Bitcoin reserves'! Sun Yuchen: USDD collateral ratio has exceeded 200% "Former New York Federal Reserve Bank President: Establishing a Bitcoin reserve by the U.S. is not good for the government and those who do not hold BTC" This article was first published on BlockTempo (BlockTempo - the most influential blockchain news media).