Many people are comparing bitcoin favorably to the centralized banking system of the United States following an interview on “60 Minutes” with U.S. Federal Reserve chairman Jerome Powell.
Jerome Powell: We Printed Money Digitally
Powell appeared to discuss the country’s reaction to the ongoing coronavirus pandemic and the issuance of over $2 trillion in federal relief aid to small businesses and American individuals alike. Many people have already received checks of a full $1,200 as required by the new stimulus bill. Anyone who made less than $75,000 as a single taxpayer was eligible for the full amount.
This reaction by the U.S. government has garnered some criticism by figures such as Elon Musk, the CEO of both SpaceX and Tesla. Musk was critical of the issuance of such fiscal payments, claiming that it’s not possible to simply print money out of nowhere like this and fork it over as a means of assistance. Some are worried that the U.S. dollar is about to be hit with heavy inflation and other monetary issues and are hedging their wealth through outside investments.
In the interview, Powell was asked by correspondent Scott Pelley if what he and other regulators did was simply “flood the system with money.” Powell responded with:
Yes, we did. We printed it digitally. As a central bank, we can create money digitally, and we do that by buying treasury bills or bonds or other government guaranteed securities, and that increases the money supply. We also print actual currency and we distribute that through the Federal Reserve bank.
When asked if the Fed had done all it can do, Powell responded:
There’s a lot more we can do. We’re not out of ammunition by a long shot. There’s really no limit to what we can do with these lending programs that we have.
Can This Really Be Done?
Many crypto and financial analysts took issue with Powell’s words, saying that simply printing money out of thin air is dangerous in the long run. They then began to tout the power and benefits of bitcoin, saying that such action couldn’t have been taken with it on account that it’s not a centralized form of finance. Marty Bent – who produces a regular bitcoin newsletter on Twitter – criticized Powell’s use of the word “we” in his phrases, commenting:
The ‘we’ here is five people voting on changes to monetary policy within the Federal Reserve system during FOMO meetings. Five out of 330,000,000. That’s all it takes to change U.S. monetary policy. It’s much harder with bitcoin.
Over the last several weeks, more reports have been issued suggesting that people are using bitcoin to potentially hedge their wealth against oncoming economic strife out of fear following the actions taken by the Fed. Some exchanges are reporting purchases of crypto of about $1,200, suggesting that some are using their stimulus money to buy digital currency.