Cryptocurrencies have been emerging at an astounding level in the past years, but the story is not the same if we talk about its validation in the financial industry.
It all seems like every time more companies are refusing to accept the benefits that virtual coins such as Bitcoin has to offer. Would it be fear? We all think this may be the case. However, in any case, some truths are just undeniable, and something we are optimistic about is that one way or another cryptography will find a way out.
Speaking of validations, St. Louis Federal Reserve recently made a post that helps this matter to be clarified. The post it is based on a previous paper investigation the entity made earlier under the name of “A Short Introduction to the World of Cryptocurrencies,” research in which the focus was mainly centered on discovering how blockchain technologies and cryptocurrencies work, more specifically, Bitcoin.
But what does the Federal Reserve of Saint Louis has to say about cryptocurrencies this time? Would it finally be a validation? Let’s find out what can we interpret from the article the organization published last week.
St. Louis Federal Reserve implications
As a matter of fact, the Federal Reserve of Saint Louis did not make advocacy regarding cryptocurrencies precisely, contrary to, it continued having a demeaning opinion. Nevertheless, it implied some exciting factors that we are more than thrilled to share.
Much has been said about the intrinsic value of cryptocurrencies, starting with the popular argument that virtual coins should be valued at zero since they don’t possess inherent value.
Furthermore, the blog post that was named “Three ways Bitcoin is like regular currencies” establishes a very valid and interesting point of view regarding this.
It says that ever since the 70s when we unliked from the gold model, most of the fiat currencies managed by the global reserves are not precisely real, in fact, currencies are intrinsically linked to how trustable the government behind the coin is.
And as we all know, in the case of the American dollar, it is just about the trust people put in the US government.
Additionally, the blog post also established at some point something that has been very argued in the crypto community, and that’s all of what’s related with the real money supply.
As per the post by Christine Smith, St. Louis content strategist, crypto enthusiasts sustain that unlike with fiat currencies, Bitcoin and other virtual currencies on the market can actually guarantee the supply of the money – while regular banks are not in conditions of doing this as they are susceptible to devalue the currencies under inflation circumstances.