Ex-head of U.S. Fed criticized bitcoin
The former chairman of the U.S. Federal Reserve criticized cryptocurrencies, calling them “a great tool for extortionists.
Ben Bernanke said in an interview with CNBC that digital currencies were designed as a replacement for fiat money but failed to succeed. According to the former U.S. official, the main attraction of crypto-assets is their speculative value, which is the only way for them to stay afloat. Bernake did not fail to emphasize that recent market developments prove his words to be true:
“If bitcoin were a decent substitute for paper money, you could use it to buy your own groceries. But nobody does, because it’s too expensive and too inconvenient.
The former Fed chairman compared bitcoin to gold, noting that the latter can be used in industry and therein lies its ancillary value. Whereas bitcoin’s value, Bernanke said, lies in creating ransomware and defrauding gullible users. Another risk associated with cryptocurrencies is that they may be subject to much more regulation. The anonymity of cryptocurrencies is also at risk, the official said.
Notably, in 2013, Bernanke saw long-term potential in digital currencies. In a letter to Congress, the official argued that if innovations were to create a faster, safer and more efficient payment system, cryptocurrencies could successfully integrate into that system.
“I don’t think that #Bitcoin is going to take over as an alternative form of money,” says @BenBernanke. pic.twitter.com/yl9gs6VZKX
– Squawk Box (@SquawkCNBC) May 16, 2022
As a reminder, the Fed talked about the risks associated with Stablecoin.