Former New York Fed President: Bitcoin reserves would be a "bad idea" for Americans

former New York Fed chairman Bill Dudley said that since Trump won the US presidential election, the price of Bitcoin has risen by more than 40%, partly because people hope he will support the establishment of government reserves for this type of cryptocurrency. He supported this idea during the campaign, and lawmakers who support cryptocurrencies have proposed ways to achieve this goal. It is difficult to imagine what benefits this would have for most Americans. However, what are the benefits of establishing Bitcoin reserves for the government or for those who do not hold Bitcoin? There are no benefits. There is no exit strategy, so its purpose is to push up inflation, not to create value for the government-the government will be forced to hold volatile tokens that do not generate any income. In order to provide funding for purchases, the Treasury Department must either borrow (thus increasing the cost of debt service), or the Fed must create currency (thus exacerbating inflation). The latter is almost no different from the Fed monetizing US government debt (similarly, according to a congressional legislative proposal, the Fed's use of the government's gold reserves will also be the same). If the Trump administration really wants to support the emerging cryptocurrency industry, it should develop a set of laws and regulations that allow it to develop and operate safely.