Senator Rand Paul (R-KY) has suggested that a cryptocurrency could replace the US dollar as the world’s reserve currency and said he is “surprised” by the rise in digital currencies.
Paul gave an interview axios on hbo, which aired on Sunday, where he discussed cryptocurrencies and criticized the dollar, saying that the US currency “is not backed by anything.”
The US dollar is the world’s reserve currency, which means it is widely used in international transactions and is the preferred currency for central banks to hold as part of their foreign exchange reserves.
The dollar has held that position since the end of World War II and its value has remained relatively stable.
Paul, speaking Axios on HBO Regarding the rise in cryptocurrency, he said: “I am amazed at its growth and I have always been, you know, another person who believed that our currency should be backed by real value like gold or silver. Or commodity, and was always thinking well that crypto isn’t backed by anything,” Paul said.
The senator suggested that cryptocurrencies could benefit from mistrust in government currencies.
“But here’s what I have now started to believe is that government currencies are so unreliable, they are also fiat currencies, they are not backed by anything,” he said. “The dollar has been more stable than most other countries and is therefore a reserve currency.”
Paul continued, “I have now started to question whether cryptocurrency can really become the world’s reserve currency as more and more people lose faith in the government.”
A fiat currency is a currency that is not backed by a commodity, but is instead guaranteed in value by the government issuing the currency. While the dollar was previously backed by gold, it has been a purely fiat currency since 1971.
Paul was asked about the use of cryptocurrency for illegal purposes and whether there should be more regulation.
“I think I’m more concerned with the government spying on our private bank accounts, whether it’s cryptocurrency or your bank account,” Paul said.
The senator was referring to a plan from the Biden administration that would require financial institutions to report to the IRS once a year the total amount of money held by at least $600 in bank, loan and investment accounts. or have at least $600 inflow and outflow.
Republicans have strongly opposed the administration’s proposal.
Cryptocurrencies are not endorsed by or regulated by the US government. They are also not backed by gold or other commodities, but have seen great growth in recent years.
Paul has expressed his support for cryptocurrencies in the past and during his campaign for the Republican presidential nomination in 2015, he announced that the campaign would accept donations in bitcoin through his website.