St Louis Fed’s Bullard: Cryptocurrencies could lead to price instability, illegal transa…

St. Louis Fed President James Bullard raised concerns about the rise of cryptocurrencies on Friday, joining other prominent economic and political officials who have questioned the fledgling platforms as Facebook prepares to launch its “Libra” digital token.

Bullard warned the rise of other currencies, digital or otherwise, that would compete against the U.S. dollar in the domestic marketplace could have an adverse effect on the dollar’s value. While competing currencies can lead to more voluntary transactions, which are a positive for the economy, they could also lead to some “now-enabled transactions [which] may be illegal or quasi-legal,” he noted.

“Cryptocurrencies are creating drift toward a non-uniform currency in the U.S., a state of affairs that has existed historically but was disliked and eventually replaced,” Bullard said while speaking at the Central Bank Research Association’s 2019 meeting in New York, adding that “currencies have to be…