Instead of ushering the U.S. into the future, cryptocurrencies are taking the country back to the 1830s, St. Louis Fed President James Bullard said Monday.
In the pre-Civil War era, 90% of U.S. money supply was privately issued banknotes. These currencies traded at different rates at different times and places. There were discount books in each town to keep track of how much each currency should be discounted.
Is something like this happening today?
“It certainly appears to be,” Bullard said in a speech to CoinDesk Consensus 2018 conference in New York.
Perhaps to underscore his theme, digital currencies have been losing value over the last 10 days. The No. 1 digital currency, bitcoin BTCUSD, +0.46% was the best of a bad bunch in trading on Monday.
At present, there are lots of privately issued cryptocurrencies, trading at various rates minute by minute, Bullard said.
According to Investing.com’s current list, more than 1,800 cryptocurrencies have launched, he noted.
The currency arrangement pre-Civil War was not popular and there was a call for uniform currency, which was implemented during the Civil War.
“The only reason this is not a bigger issue today is that the total volume of cryptocurrency trade is not that large in relation to the entire economy,” he said.
Nouriel Roubini, the famously bearish economics professor at New York University, said that the cryptocurrency will take the U.S. “back to the stone age.”