A top official with the U.S. Federal Reserve insists instability in exchange rates remains the biggest obstacle toward more widespread cryptocurrency acceptance.
St. Louis Fed President James Bullard made his comments Monday.
Bitcoin and its growing legion of competitors have been on a highly volatile ride, particularly over the past year and a half or so. At one point last year, one bitcoin was going for nearly $20,000, and is now trading for less than half that.
Such a lack of uniformity has kept speculators heavily active in crypto trading. However, Bullard said it likely also will drive away consumers and businesses.
Many of those major nation-state currencies haven't experienced anything close to what's happened with cryptos.
However, some, like Venezuela and Zimbabwe have, due in large part because they didn't control the issuance of their currencies and ended up with hyperinflation, Bullard said.
While bitcoin has a finite level set on ultimate issuance, the crypto space has struggled to keep investor confidence about maintaining value.
"You've got this kind of special problem of who's going to issue the currency and what are those promises about future issuance and can you really maintain the credibility of those promises," Bullard earlier told audience members at the conference. "If you can't, the value of your currency is going to zero the same way the Venezuelan bolivar has."
Bullard said it's not likely at this point that the U.S. central bank will introduce its own digital currency, as some have suggested. He expressed confidence that the dollar is not threatened by cryptos, though his presence at the conference suggested the Fed is watching developments.
