Former OCC official says crypto has backing but dollar ‘may not’
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Brian Brooks, former acting comptroller of the U.S. Office of the Comptroller of the Currency, has argued that cryptocurrencies like bitcoin (BTC) have some support, while the U.S. dollar may not.
Brooks made his comments in a CNBC Squawk Box interview with Joseph Kernen to unpack recent bitcoin-related remarks by Federal Reserve Chairman Jerome Powell. Earlier this week, Powell argued that cryptocurrencies like bitcoin are essentially a substitute for gold, but at the same time are not backed by anything.
CNBC anchor Kernen noted that gold has always been a store of value and expressed confusion about Powell’s comments. He just said it was like gold, but not a store of value. Doesn’t he think gold is a store of value?
In response, Brooks said there are many reasons why people have flocked to bitcoin over the past year, including an increased supply of dollars by the Fed. If so, that means the dollar is worth at least 40% less than it was a year ago. And that’s one of the reasons people choose bitcoin, he explained.
On the United States’ abandonment of the gold standard under President Richard Nixon in 1971, Brooks said:
What I really mean is that the dollar can’t really be backed by anything […] But cryptocurrencies are backed by something. They are supported by underlying networks, and when you buy a cryptotoken – any token – you are buying part of a financial network that is built to do all kinds of transactions.
According to Brooks, the growth of online apps in recent years is the main reason why the cryptocurrency industry is now worth nearly $2 trillion. I believe in the wisdom of crowds. I think the crowd is telling you that these networks are the future of finance. I want to be a part of it, he decided.
The US authorities are actively investigating the concept of the digital dollar. On Monday, Powell said the Fed would not take action on the digital dollar without the support of Congress.
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