John Williams, widely expected to be the next president of the New York Federal Reserve, admits that he is biased against cryptocurrency, and suggests that digital currency “doesn’t pass the basic test of what a currency should be”, according to CNBC.
Williams, head of the San Francisco Federal Reserve Bank, expressed in a speech on Friday that cryptocurrencies offered more a promise of technology than that of currency. He added that a currency should be something with a “store of value” and that cryptocurrencies lack the elasticity to support varying economic and financial conditions. He suggested that:
“The setup or institutional arrangement around Bitcoin and other cryptocurrencies, first of all, they have problems with fraud, problems with money laundering, terror financing. There’s lots of problems there… The idea of the supply of currency and thinking about currency really belongs more in the sphere of government and central banks…”
US cryptocurrency investors are still searching for clarity regarding the future regulation of the industry. This has recently resulted in some top investors appealing for the Security and Exchange Commission to relax current regulations to encourage business.
Between the 12 regional federal banks in the US Federal Reserve System, the New York Federal Reserve Bank and its president are considered first among equals. The New York Fed is the largest by assets and the most active by volume. While US monetary policy is decided by the Federal Reserve Board of Governors in Washington DC, the New York Fed is where it is implemented.
He was president of the San Francisco Fed while Wells Fargo, which is based in San Francisco, engaged in aggressive sales practices that resulted in the opening of millions of accounts without customers’ knowledge. His supporters maintain that he has pushed the central bank to consider a new approach to monetary policy which augers well for the future.
Williams is expected to lead the New York Federal Reserve Bank in June when current President, William Dudley, will step down.