Former New York Fed Chairman: Bitcoin reserves would be a bad deal for Americans

Bitget news, former New York Fed Chairman Bill Dudley stated that since Trump won the US presidential election, Bitcoin prices have risen by more than 40%. Part of the reason is that people hope he will support the establishment of government reserves for this cryptocurrency. He supported this idea during his campaign and legislators who support cryptocurrencies have proposed ways to achieve this goal. It's hard to imagine what benefits this would bring to most Americans.

However, what are the benefits of establishing a Bitcoin reserve for governments or those who do not hold Bitcoin? There are none. There is no exit strategy, so its purpose is to drive up inflation rather than create value for the government - the government will be forced to hold volatile tokens that generate no income. To provide purchasing funds, either Treasury must borrow (thus increasing debt service costs), or Federal Reserve must create money (thereby exacerbating inflation). The latter has little difference from Federal Reserve monetizing U.S. government debt (similarly, according to congressional legislative proposals instructing Federal Reserve to use government gold reserves would also do so).