Brian Brooks, a former acting controller of the US Currency Exchange, claimed that cryptocurrencies such as Bitcoin (BTC) have some support, while US dollars may not.
Brooks made the remarks in an interview with CNBC Squawk Box with Joseph Kernan to decipher recent notes on Bitcoin made by US Federal Reserve Chairman Jerome Powell. Powell argued earlier this week that cryptocurrencies such as Bitcoin are “largely an alternative to gold,” but at the same time “they are not supported by anything.”
CNBC host Kern noted that gold has historically been considered a value of value, and expressed confusion over Powell’s comments. “He just said it was like gold, but not a store of value. Does he not think gold is a store of value? ”
In response, Brooks said that over the past year, people have turned to bitcoin for many reasons, including the huge increase in the Fed’s dollar supply. “When you do that, it means that there are at least 40% less securities in the dollar portfolio than a year ago. This is one of the reasons why people choose Bitcoin.
Referring to the United States’ abandonment of the gold standard under President Richard Nixon in 1971, Brooks said:
“I really want to emphasize that the dollar may not be supported by anything […], but in fact cryptocurrencies are supported by something. They are backed by backbones, and what you buy when you buy a cryptocurrency – be it bitcoin or whatever – you buy a piece of a financial network dedicated to handling all sorts of things. ”
Brooks stated that the increase in network applications in recent years is the main reason why the crypto industry is worth around 2 trillion dollars today. “I believe in the wisdom of the multitudes. I think the masses are telling you that these networks are where the financial resources of the future are channeled. I want to be a part of it. ”
The US government is actively exploring the concept of digital dollars. Powell said Monday that the Federal Reserve will not handle the digital dollar without congressional support.