Patrick Harker, the head man at the Philadelphia Federal Reserve Bank, took the stage during a fintech event to question the trust factor involved in money.
The Fed spokesman made it clear that Bitcoin still lacks the trust that dollars possess. He also made it clear that, should a substantial catastrophe strike Bitcoin, investors would quickly flee the currency for dollars. Harker said:
“The paper that’s in your pocket, that we call money, only has value because we believe it has value, because we believe the government stands behind it. It’s all trust issues.”
Harker continued by saying that the current economic cycle has shielded cryptocurrency investors from any substantial losses. He added that when the market does correct, investors will ask for Federal Reserve involvement.
His comments reflect a general understanding of the difference between government regulated fiat currencies, and Bitcoin and other cryptocurrencies which are regulated only by the internal mathematical algorithm that the currency rests upon.
Apparently Harker believes that the Federal Reserve is more trustworthy than math. When asked if the Fed would regulate Bitcoin and other cryptocurrencies, Harker answered:
“How do you regulate an algorithm? I don’t know yet. The answer is we have to continue to study this.”