The former chairman of the US Federal Reserve has criticized cryptocurrencies, calling them “a great tool for extortionists.”
Ben Bernanke interview CNBC stated that digital currencies were conceived as a replacement for fiat money, but did not succeed in this. According to a former US official, the main attraction of crypto assets is their speculative nature, and this is the only way they can stay afloat. Bernacke did not fail to emphasize that recent market events prove the veracity of his words:
“If bitcoin were a worthy replacement for fiat money, you could use it to buy your own groceries. However, no one does this because it is too expensive and too inconvenient.”
The former Fed chairman compared bitcoin to gold, noting that the latter can be used in industry and this is its ancillary value. Whereas the value of bitcoin, says Bernanke, is to create ransomware and deceive gullible users. Another risk associated with cryptocurrencies is that they may be subject to much more stringent regulation. The anonymity of cryptocurrencies is also under threat, 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 contribute to the creation of a faster, safer and more efficient payment system, then cryptocurrencies will be successfully integrated into this system.
However, already in 2017, the rhetoric of the former Fed chairman changed dramatically. He stated that bitcoin is an attempt to replace fiat currency and avoid government regulation.
Source: Bits
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