The US Federal Reserve St.Louis branch announced they are officially indexing cryptocurrencies – using the publicly available charting data provided by Coinbase.
Announced on Tuesday, the Federal Reserve Economic Data (FRED), a database curated by the St. Louis Fed, will now include pricing data for Bitcoin (BTC), Ethereum (ETH), Bitcoin cash (BCH), and Litecoin (LTC).
Data points are obtained from San Francisco-based cryptocurrency exchange and brokerage platform Coinbase and updated daily at 5 pm PST.
There is some history showing various people from the Federal Reserve were keeping a close eye on the cryptocurrency world for some time – however, the move today says they see it as an economic factor worth more than just casually monitoring.
St. Louis Fed. Governor James Bullard recently spoke at cryptocurrency conference Consensus, which was held last month in New York. He expressed concern that cryptocurrencies could cause the monetary landscape to revert back to a “non-uniform currency system,” such as existed in past centuries.
He said :
Cryptocurrencies may unwittingly be pushing in the wrong direction in trying to solve an important social problem, which is how best to facilitate market-based exchange.
Moreover, the St. Louis Fed published an article earlier this year in which it noted that bitcoin is not really all that different from “regular currency” such as the US dollar. Specifically, the Fed said that both BTC and USD are backed by nothing, scarce, and — at least in the case of cash — decentralized.
Just a couple months ago Lael Brainard from the U.S. Federal Reserve’s Board of Governors spoke on the topic of cryptocurrency in San Francisco, saying:
Because of the transformative potential of digital currency and distributed ledger technologies, the Federal Reserve is actively monitoring digital innovations in the financial system. We have been keenly evaluating developments in fintech and digital currencies through a multidisciplinary lens, combining information technology and policy analysis to study their potential implications for payments policy, supervision and regulation, financial stability, monetary policy, and the provision of financial services. This work draws from expertise throughout the Federal Reserve System and benefits from engagement with our colleagues internationally.
However, officials at other branches of the Fed have been less amicable toward cryptocurrencies.
Raphael Bostic, who heads the Federal Reserve Bank of Atlanta, warned young people at a recent conference not to invest in cryptocurrencies, which he compared to hype-driven collectibles such as Beanie Babies.
Minneapolis Federal Reserve President Neel Kashkari, similarly, said in May that the cryptocurrency market has “become a farce” and that blockchain technology is “probably more interesting and has more potential” than bitcoin.
Meanwhile, the Federal Reserve Bank of San Francisco released a report which argued that the true value of bitcoin is $1,800, a figure that roughly correlates to the cost of mining one bitcoin. The bank arrived at this figure by valuing bitcoin by similar metrics as those often applied to entrenched commodities like gold and oil.
It’s important to think about the private discussions behind the scenes that lead up to a move like this, it’s a sign the Federal Reserve’s leadership are in agreement that cryptocurrency is here to stay. This wouldn’t be worth doing if they thought otherwise.
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