In a recent statement, Mary Daly, President of the Federal Reserve Bank of San Francisco, emphasized that cryptocurrencies should be viewed as a distinct asset class, rather than being compared to gold. Daly highlighted the complexity of cryptocurrencies and their unsuitability as a traditional currency. She noted that crypto assets need to define their purpose, whether as a medium of exchange, speculative asset, or store of value.
Daly’s Perspective on Cryptocurrencies
Daly’s comments underscore the unique characteristics of cryptocurrencies, which set them apart from traditional currencies. She pointed out that their volatility and demand-driven value differ significantly from the stability of traditional currencies. This perspective is in line with her emphasis on the need for crypto assets to establish a clear purpose.
Contrasting Views Within the Fed
Daly’s views on cryptocurrencies diverge from those of Federal Reserve Chair Jerome Powell, who previously likened Bitcoin to virtual gold. Despite their differing opinions, both Daly and Powell agree that cryptocurrencies currently do not meet the necessary conditions to function as a traditional currency.
Implications for the Crypto Market
The statements from Daly and Powell highlight the ongoing debate about the role and classification of cryptocurrencies in the financial system. As regulators and market participants continue to navigate the complexities of crypto assets, the need for clear definitions and purposes becomes increasingly important.
Source: Binance.com
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