This week the Orrin Hatch Foundation published a webinar video featuring Bitstamp CEO Bobby Zagotta, former Federal Reserve vice chairman Randal Quarles, and the Republican senator from Wyoming, Cynthia Lummis. The host of the webinar Matt Sandgren mentioned to Quarles that in the early days, bitcoin was met with skepticism from Washington and Wall Street. Sandgren continued by adding that now things seem to be changing and he asked the former Federal Reserve vice chairman if he agreed perspectives have changed.
“I think in the early years it wasn’t really clear what the widespread use case would be for bitcoin or similar crypto assets,” Quarles replied. “They solved some technical issues in the payment system but the price volatility made them ill-suited to be an actual payments mechanism. So the principal attractions seem to be independence from the regulated monetary system and anonymity. Neither of those are going to be terribly attractive to Washington.” Quarles continued:
For Wall Street, if you are an investor considering a novel technology with an unclear use case that’s likely to attract unwelcome attention from regulators and law enforcement you’re going to move slowly.
Quarles then said that things are changing now for a few reasons and one of them includes stablecoins. He thinks because stablecoins “tame the volatility” they are more useful.
US Senator Lummis: I Think It’s a Great Idea for the Fed to Hold Bitcoin
Following Quarles’ statements and a description of what cryptocurrency is from Bitstamp’s Zagotta, Lummis told Sandgren that she thought it was a “great idea” for the Federal Reserve to purchase bitcoin and hold it on its balance sheet. “Once there is a statutory and regulatory framework, that will make a lot of sense — The fact that bitcoin is completely decentralized, it’s going to make it over time more ubiquitous,” Lummis remarked. The senator from Wyoming added:
I think [bitcoin] is going to be something that the Fed should hold on its balance sheet.
Senator Cynthia Lummis has been a fan of bitcoin and digital currencies for quite some time and she recently thanked God for bitcoin when the U.S. Congress discussed raising the debt ceiling. During the first week of October, Lummis disclosed that she purchased more bitcoin and said she sees BTC as an “excellent store of value.”
However, panel speaker Quarles did not agree with Lummis’ opinion, and he stressed it is unlikely that the U.S. central bank will add BTC to its balance sheet. “For a lot of political, economic reasons,” Quarles said. “I think that it’s best to keep the Fed’s balance sheet.”
During her panel statements, Lummis reiterated that she believes bitcoin is a store of value, scarce, and predictable. “Bitcoin is digital gold — it’s hard money — There will only be 21 million ever produced,” Lummis insisted during the panel webinar.