Cryptocurrencies became a mainstream focus during Federal Reserve Chairman Jerome Powell’s second day of testimony before the U.S. Senate. Lawmakers expressed their concerns about the threat that bitcoin and other cryptocurrencies pose to the financial system, including the possibility that bitcoin may become the new world reserve currency and replace the U.S. dollar.

Powell admitted this was possible, but only in the long run. He also emphasized that the U.S. should not assume that the dollar would remain a reserve currency forever.

Senators also expressed their uneasiness about private corporations, such as Facebook, trying to create their own currency and monetary policy with their money and power.

Economist and CEO of broker corporation Euro Pacific Capital Peter Schiff reacted to Powell’s statement as follows: “Powell is wrong. The world does not need another reserve currency to replace the dollar. Gold is a much better reserve asset than any other fiat currency. The dollar only became the reserve currency due to its gold backing.“

On July 7, 2019, during Powell’s testimony on monetary policy before the Senate, the value of bitcoin dropped below USD 12,000 after Powell expressed his “serious concerns” about the planned Libra cryptocurrency. Bitcoin, however, is already relatively resistant against major fluctuations, since it keeps moving around the USD 12,000 mark.