The United States Congressional Research Service (CRS) has claimed that cryptocurrency is a ‘speculative investment vehicle’ and most certainly ‘not money’.
The report published on May 10 delves into the potential decline of paper cash and subsequent emergence of online alternatives.
It is forecast that while contactless card payments increase, so will other forms of payment including cryptocurrency and central bank-issued digital currencies (CBDCs).
The report states: “Although price data on Bitcoin illustrates the public interest in and overall demand for this cryptocurrency, it is a poor indicator of how often it is being exchanged for goods and services (or how often it is being used as money).”
It continues: “Certain analyses appear to show that digital currencies are not being widely used and accepted as payment for goods and services, but rather as investment vehicles.”
The Congressional Research Service examined the decline in cash usage in the United States and the potential rise of alternative payment systems, including bitcoin or other digital assets, in the purchase of goods and services.
— Matt⚡️ (@MatthewLINY) May 29, 2019
The price of cryptocurrencies has skyrocketed during 2019, with several altcoins rallying more than 300%.
Bitcoin has risen from a low of $3,150 in December to a high of $8,900 earlier this week. While this resurgence has been viewed in a positive light by many, it reinforces the notion that it is a speculative investment vehicle and not a mode of payment.
“Cryptocurrencies can have significant value fluctuations within short periods of time; as a result, pricing goods and services in units of cryptocurrency would require frequent repricing and likely would cause confusion among buyers and sellers,” the report continues.
“At present, the systems underlying cryptocurrencies do not appear capable of processing the number of transactions that would be required of a widely adopted, global payment system.”
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