May 14, 2018 / 1:44 PM / a year ago

Fed's Bullard cautions cryptocurrencies' "non-uniform" risks

NEW YORK, May 14 (Reuters) - The growth in bitcoin and other digital currencies is creating a “non-uniform” currency in the United States, which in the past has existed but was ultimately rejected and replaced, St. Louis Federal Reserve Bank President James Bullard said on Monday.

While acknowledging the promise of blockchain and related technologies that support cryptocurrencies, Bullard said consumers and businesses may not like a non-uniform currency system in which many types of currency trade at the same time at different prices in the same local market.

“Cryptocurrencies may unwittingly be pushing in the wrong direction in trying to solve an important social problem, which is how best to facilitate market-based exchange,” Bullard said in a prepared speech at the CoinDesk Consensus 2018 conference.

Societies disliked non-uniform currency systems because the currencies trade at different values. This can be solved by using a uniform currency such as the U.S. dollar which is backed by the government and supported by a stable monetary policy from the Federal Reserve.

He noted over 1,800 cryptocurrencies have been launched. (Reporting by Gertrude Chavez and Richard Leong Editing by Chizu Nomiyama)

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