Just recently, the Federal Reserve has announced drastic measures to counter the financial crisis sparked by the coronavirus pandemic.
Among some of the tools being used by the Fed, such as zero reserve requirements for banks, include the unlimited printing of money in order to satisfy liquidity requirements.
In response to this news, CEO of Cardano developer IOHK Charles Hoskinson tweeted he was “getting a real OneCoin vibe”
Congress: just print more money
President of the Federal Reserve Bank of Minneapolis, Neel Kashkari, stated there was “an infinite amount of cash at the federal reserve” during an interview with CBS’s 60 Minutes.
“That’s literally what Congress has told us to do. That’s the authority that they’ve given us: to print money and provide liquidity into the financial system.”
Neel Kashkari, President of the Federal Reserve Bank of Minneapolis
The news of the central bank being given the green to print as much money as needed is what led to Hoskinson’s comparison of the USD to the infamous OneCoin scam.
For those unaware, OneCoin was a crypto scam that made at least $4 billion by defrauding investors into buying a worthless token with no underlying value.
Other responses from the crypto community
Other leaders in the crypto industry responded to the Fed’s news, however in a less direct way than Hoskinson’s.
Anthony Pompliano, co-founder of Morgan Creek Digital, tweeted how such acts were “not sustainable long-term”.
Furthermore, CZ, CEO of industry-leading exchange Binance, tweeted a simple reference to basic supply and demand, outlining how the Fed’s actions can significantly effect price.
After news of the Federal Reserve’s plans of printing as much money as needed into the financial system in order to satisfy liquidity, Bitcoin saw a slight bounce back up from around $6000 to $6500.
As the COVID-19 sparked crisis continues, and the Fed announces more updates as to how they plan to deal with it, things may be looking bright for crypto, yet gloomy for the world economy.