Federal Reserve Bank of Chicago President Austan Goolsbee Discusses Cryptocurrency

Federal Reserve Bank of Chicago President Austan Goolsbee offered his perspective on cryptocurrency on Friday, addressing its limited macroeconomic impact and speculative nature.

While Goolsbee acknowledged the recent rise of crypto-based assets, he stressed that they have not significantly affected the broader economy in the way traditional financial system assets, such as stocks, do. He noted that while investors may experience a wealth effect from rising crypto prices, the lack of a clear real-world use of many crypto assets limits their direct impact on the economy.

He also warned against linking highly volatile crypto assets to the concept of the lender of last resort, a role traditionally reserved for more stable financial instruments. Goolsbee expressed concern over the risks associated with speculative investments, particularly when those can rise or fall dramatically in a single day, emphasizing that such assets cannot be considered currencies.