Senator Rand Paul is wondering whether cryptocurrency could dethrone the dollar as the world’s reserve currency as it continues to grow in popularity.
“I’ve started to question now whether or not cryptocurrency could actually become the reserve currency of the world, as more and more people lose confidence in government,” Paul said in an interview on “Axios on HBO” that aired on Sunday (Oct. 24).
As The Hill notes, Paul, a Republican from Kentucky, garnered headlines during his presidential run in 2015 when he announced that his campaign website would accept bitcoin donations. In his recent interview, Paul said cryptocurrency has grown more than he ever expected back then.
“I’ve been amazed at the growth of it, and I’ve always been … more a person who believed that our currency should be backed by something of real value, like gold or silver or commodities.” But Paul added that he believes “government currencies are so unreliable, they’re also fiat currencies, they’re not backed by anything. The dollar has been more stable than most other countries, and so it is the reserve currency.”
When asked if he was concerned about the illicit use of crypto and whether it should face more regulation, the senator pointed to government oversight of private banks. “I guess I’m more concerned with government snooping into our private bank accounts, whether it’s cryptocurrency or your bank account,” he said.
PYMNTS examined the question of how to regulate cryptocurrency last week in an interview with QED Investors Partner and former U.S. Department of the Treasury Assistant Secretary Amias Gerety. He told PYMNTS’ Karen Webster that American laws are broad enough to cover cryptos, even if they weren’t created with specific technologies in mind.
Regulators simply need to know what the technology is capable of, but they don’t need an understanding of every complex technical detail just to make good law, he maintained. “If you can understand clearly what the technology is doing, I think you can make pretty good judgments about what the fundamental financial activity is and what regulatory box that financial activity can or should fit in,” Gerety said.