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Taking up recent remarks made by the U.S. Federal Reserve chair Jerome Powell on Bitcoin, former acting comptroller of the currency of the United States Office of the Comptroller of the Currency, Brian Brooks, sat down with CNBC Squawk Box to counter these.
Earlier in the week, Powell had made some claims that Bitcoin could be a “substitute for gold”, however at the same time it is “not backed by anything” according to him.
In his interview on the CNBC program, Brooks countered Powell’s remarks and claimed that it might actually be the U.S. dollar that is not backed by anything since they United States had abandoned the gold standard under President Richard Nixon in 1972.
Squawk Box host Kernen pointed to the fact that gold has historically been seen as a store of value and thereby expressing confusion over Powell’s comments, stating. “He just said it’s like gold but not a store of value. Does he not think that gold is a store of value?”
Brooks responded by saying that there are multiple explanations for the popularity of Bitcoin among the retail investors and one of the explanations includes the U.S. fed’s decision to keep the money printing machine running. “So when you do that, it means that the dollar is at least a 40% less good store of value than it was a year ago. And that is one of the reasons people opt to Bitcoin,” he said.
Brooks then added:
“The point I really wanna make is the dollar may not actually be backed by anything […] But cryptocurrencies actually are backed by something. They’re backed by underlying networks, and what you’re buying when you buy a crypto token — whatever it is Bitcoin or anything else — you’re buying a piece of a financial network built to transact all kinds of stuff.”
According to Brooks, the increasing number of network applications over the past few years is the main reason that the crypto industry is near a $2 trillion market today. “I believe in the wisdom of crowds. I think that crowds are telling you that these networks are where finances are going in the future. I wanna be part of that,” he came to an end.