Dallas Fed President Kaplan Praises Bitcoin as a Store of Value
• Federal Reserve Bank of Dallas chief says bitcoin is “a store of value”
• Robert Kaplan thinks CBDC would serve better than bitcoin as a payment method
What did Kaplan have to say about Bitcoin?
Bitcoin continues to make the rounds across traditional institutions, government agencies and central banks. The Federal Reserve Bank of Dallas is the latest high-profile institution to weigh in on bitcoin and the cryptocurrency market. Robert Kaplan, the President of the Federal Reserve Bank of Dallas, got a chance to comment on the emerging crypto industry at the Texas A&M Bitcoin Conference 2021 hosted by Mays Business School.
“Right now, it’s clear it’s a store of value,” Mr. Kaplan said during the conference. “It obviously moves a lot in value,” he added. “That may keep it from spreading too far as a medium of exchange and wide adoption but that can change and that will evolve.” Robert Kaplan also mentioned he has been exploring bitcoin “intensely” and will “keep studying bitcoin and other cryptocurrencies”.
What distinguishes Bitcoin from central bank digital currencies (CBDCs)?
He also talked about central bank digital currencies (CBDC). These have been growing in popularity among central banks around the world. On that note, Mr. Kaplan emphasized on the differences between bitcoin, serving as a store of value, and CBDCs, which “won’t necessarily be a store of value”. Digital currencies, issued by central banks will be pegged to the underlying sovereign currency and will, therefore, be tied to its value in that if the fiat currency devaluates, the CBDC will devaluate by the same amount.
“If you’re worried about the value of underlying currency, digital currency is likely to be, for example in China, tied to the value of the underlying,” he argued, saying it’s also “a way of ease of payment, domestic payments first, getting money to where it’s needed.”
The Dallas Fed is one of the twelve reserve banks in the Federal Reserve system. It serves the Eleventh Federal Reserve District, which includes Texas, northern Louisiana and southern New Mexico. Working in that area, the Fed bank aims to promote a strong financial system and healthy economy. Robert Kaplan has been at the helm of the Dallas Fed since 2015. He is a former Goldman Sachs executive and a Harvard Business School professor.