The Federal Reserve of St. Louis has categorized Bitcoin has regular currency just like the US Dollar and EURO – could this be a form of validation of the cryptocurrency?
In a blog post this week based on an earlier Fed research paper, it stated that “bitcoin has no intrinsic value” but it also added that currencies like the US Dollar, EURO and the likes have no intrinsic value either.
The write-up by the St. Louis Federal Reserve which is titled “Three Ways Bitcoin is Like Regular Currency” also highlighted Bitcoin’s short comings. It makes note of the fact that the cryptocurrency space is replete with a number of scam schemes which have become particularly rampant due to its remarkable surge in value in the year 2017.
The bright side for crypto-enthusiasts is the fact that the St. Louis Fed rebuffed misguided criticisms that because cryptocurrencies like Bitcoin are not tied to particular commodities, they should not have monetary value. The Fed points out that most global fiduciary currencies are also not tied to any commodities and only rely on trust to function as media of value exchange.
It says that juxtaposing with the US Dollar which mostly derives its value from the trust in the US Government and economy, Bitcoin and other cryptocurrencies have trust in complex computer codes and to an extend its developers/miners.
The reports also prop up the fact that most cryptocurrencies like Bitcoin have limited known values which is a good thing to help check arbitrary money supply and inflation.