Jason Wu, founder and CEO of DeFiner, the digital dollar can bring benefits not only to Bitcoin, but to the crypto market in general
In February, Federal Reserve (Fed) chairman Jerome Powell suggested that the Fed was working on a digital version of the US dollar when he spoke in front of the House Financial Services Committee.
At that time, it seemed that Bitcoin (BTC) was up for 2020, after its surprisingly optimistic performance in January, which continued to gain traction in the first two weeks of February. The price of BTC reached $ 10,000 for the first time since October 2019.
The shares were also setting high records at the time. However, the entire speculative climate of the financial markets was reversed when it was realized that the impact of the new coronavirus was much more serious than initially thought.
Some point to the need to carry out transactions with cryptocurrencies or digitized money as a way to prevent the spread through physical forms of payment, although there is no scientific consensus on how COVID-19 spreads.
Still, there is no indication of when the Fed will implement a digital dollar, but if it does, many of those in the cryptocurrency space think it will increase the price of the main reference cryptocurrency.
“The idea of a Fed digital dollar will undoubtedly increase the price of Bitcoin. It is a strong indication of the mass adoption of cryptocurrencies driven by none other than the government. ” Ashish Singhal, co-founder and CEO of CoinSwitch.co and CRUXPay, explained to the International Business Times.
Bitcoin suffered a more massive blow than stocks in mid-March, dropping to less than $ 4,000 in the process. The main cryptocurrency did not recover much of what it had lost, as it is currently stagnating around the $ 6,000 region.
And if a U.S. digital dollar enters traditional finance, according to Jason Wu, founder and CEO of DeFiner, “it will help educate the public to accept blockchain-based services and eliminate the natural fear and risk perception of new technologies. ”.
“Bitcoin is digital gold in the world of digital assets, the GDP of the digital world is captured by Bitcoin; therefore, the Bitcoin price trend will definitely increase, ”added Wu.
But a US digital dollar will still depend largely on how far the government will support it. Facebook’s cryptocurrency proposal, Libra, is currently in limbo as it was heavily scrutinized by the US Congress in October.