Former New York Federal Reserve President: Establishing a Bitcoin reserve in the U.S. is not good for the government or those who do not hold BTC

Former New York Federal Reserve President Bill Dudley recently stated that establishing a Bitcoin reserve in the United States does not bring any benefits to the government or those who do not hold Bitcoin. (Background: Trump nominated Basent to serve as Secretary of the Treasury; what is his stance on cryptocurrencies and support for a Bitcoin reserve?) (Additional context: The cryptocurrency advisory committee established by Trump will assist in creating a U.S. Bitcoin reserve) According to CoinGecko data, since Trump won the U.S. election, Bitcoin has surged 31.6% in the past month, reaching a peak of over $100,000 on December 5, hitting $104,056, with a market value surpassing that of Saudi Arabia's national oil company, making it the seventh largest asset globally. Bitcoin trend. Source: CoinGecko Former New York Federal Reserve President: Establishing a Bitcoin reserve has no benefits However, former New York Federal Reserve President and former Vice Chair of the Federal Open Market Committee Bill Dudley responded yesterday (6th) in a Bloomberg report that part of the recent rise in Bitcoin is due to the promising prospect of the U.S. establishing a Bitcoin reserve under Trump, but he believes that there are actually no benefits to the U.S. establishing a Bitcoin reserve. Advantages of Bitcoin First, Dudley acknowledged the positive attributes of Bitcoin. He believes Bitcoin is convenient, meaning that regardless of the price of Bitcoin, holders can carry it with just a USB flash drive. Secondly, Bitcoin also has semi-anonymity. That is, holders can transfer and use it for transactions without revealing any identity information and without relying on any third-party institutions. Additionally, Bitcoin can resist inflation. Because the issuance of Bitcoin is designed to be 21 million coins, higher prices will not bring more supply, while greater demand will push Bitcoin to higher prices. Establishing a Bitcoin reserve has no benefits However, even with the above advantages of Bitcoin, Dudley believes that establishing a Bitcoin reserve does not bring any benefits to the government or those who do not hold Bitcoin: There is no exit strategy, as its purpose is to drive up inflation rather than 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: U.S. to buy 1 million BTC in 5 years) Senator Lummis's Bitcoin reserve bill is out, where will the funds come from? Trump should establish safe regulations However, in the end, Dudley suggested that if Trump really wants to support the development of the cryptocurrency industry, what he needs is 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. Legislate to define whether tokens are currency or securities and who should regulate them. Establish rules to protect consumers and prohibit their use for financing terrorism or illegal drug sales, etc. 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 has plenty of cash! USDT Q2 net profit of $1 billion, Bitcoin reserves rise to $1.67 billion U.S. to buy 1 million BTC in 5 years) Senator Lummis's Bitcoin reserve bill is out, where will the funds come from? Tron transfers $100 million to 'purchase Bitcoin reserves'! Sun Yuchen: USDD collateral ratio has exceeded 200%"Former New York Federal Reserve President: Establishing a Bitcoin reserve in the U.S. is not good for the government or those who do not hold BTC" This article was first published on BlockTempo (BlockTempo - the most influential blockchain news media).