On the day of Coinbase's listing, Powell called digital currency a speculative tool

On the day when Coinbase, the first cryptocurrency exchange, landed in the U.S. stock market, Federal Reserve Powell poured cold water on cryptocurrencies.

Eastern time this Wednesday, Powell said in an online interview with the Washington Athletic Club of the Forum: "Cryptocurrencies are actually tools for speculation. They are not really actively used for payments."

Powell compared cryptocurrencies to gold, saying that "for thousands of years, humans have given gold a special value," which is a value that industrial metals do not have. He believes that cryptocurrencies are mainly used to bet on rising prices and have not reached the status of payment mechanism.

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This is Powell again mentioning the speculative use of cryptocurrencies. During a U.S. Congressional hearing last month, Powell said that private cryptocurrencies represented by Bitcoin are more suitable for speculation and cannot be used as a substitute for the U.S. dollar. A completely private digital U.S. dollar system is not reliable.

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Powell's evaluation of cryptocurrencies is consistent with his predecessor and former Federal Reserve Chairman Yellen, who is now the US Treasury Secretary.

Member of the Board of Directors of the Bank of Lithuania: LBCOIN is a testing ground for testing CBDC: At the press conference this morning, the Lithuanian Central Bank demonstrated the digital commemorative coin LBCoin, and the central bank also launched an e-store lbcoin.lb.lt dedicated to the LBCoin project. Marius Jurgilas, a member of the board of directors of the Bank of Lithuania, said, "Today, we have opened a new chapter in the history of numismatics and further explored the potential of central bank digital currency (CBDC). When the central bank begins to change its views on digital currency, LBCOIN may be a test A state-of-the-art testing ground for different incarnations of CBDC.” According to Egidijus Paleckis, one of the LBCoin project managers, registration is already open, while the token sale will begin on July 23. (Crypto News)[2020/7/9]

Wall Street has previously mentioned that in February this year, Yellen said that Bitcoin is a "highly speculative asset" and that digital currencies may bring faster and cheaper payment experiences, "but there are many issues that need to be studied, including consumption." protection and anti-money laundering”. She also said that conducting transactions in bitcoin is an "extremely inefficient way" to process these transactions, which consumes a staggering amount of energy.

When attending a congressional hearing with Powell last month, Yellen also said that it is necessary to be vigilant against digital currencies being used for illegal financing.

After Powell made cryptocurrency-related remarks on Wednesday, Coinbase, the largest cryptocurrency exchange in the United States that had just been directly listed on Nasdaq that day, gave up most of its gains during the day. Although it closed up more than 31%, the increase was not as high as when it refreshed its daily high Half of the intraday gain of more than 70%.

Before Coinbase’s listing, on Monday and Tuesday this week, the world’s highest market capitalization cryptocurrency Bitcoin (BTC) and the second largest cryptocurrency Ethereum (ETH) both hit record highs. There are two hundred-digit marks of $2,300 and $2,400. Some analysts believe that the listing of Coinbase may become a "watershed" in the cryptocurrency industry, and the market will pay close attention to changes in its stock price to assess investors' appetite for the cryptocurrency behind it.

After Powell's speech, Bitcoin, which hit a record high of US$65,000 on Wednesday, once fell by more than US$3,400, down more than 5% from the intraday high. By the time the US stock market closed, it had fallen by more than 1% in the last 24 hours. At one point, Ethereum fell 5% from its record high.

Companies that conduct bitcoin-related businesses or invest in bitcoin all fell on Wednesday, Tesla fell nearly 4%, Square, PayPal, and MicroStrategy closed down more than 5%, nearly 3%, and more than 13%, respectively. Among the blockchain concept stocks in the U.S. stock market, only Coinbase stood out on Wednesday.

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