Janet Yellen Throws Shade As Bitcoin Turns 10 Years Old
(Kitco News) - Cryptocurrencies have no place in the global economy as a legitimate unit of money, this according to Janet Yellen, former Chair of the Federal Reserve.
“I am not a fan of bitcoin, let me tell you why,” Yellen told an audience during a live panel at the 2018 Canada FinTech Forum in Montreal on Monday.
Yellen said that cryptocurrencies like bitcoin lack the necessary characteristics typical of fiat money.
"It has long been thought that for something to be a useful currency, it needs to be a stable source of value, and bitcoin is anything but. It's not used for a lot of transactions, it's not a stable source of value, and it's not an efficient means of processing payments. It's very slow in handling payments. It has difficulties because of its very decentralized nature," she said.
Yellen’s comments were made on the eve of bitcoin’s 10-year anniversary; October 31st, 2008, marks the day the first bitcoin whitepaper was published by Satoshi Nakamoto, a pseudonym whose real identity is yet to be identified.
The paper outlined the use of a “purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution,” which formed the basis of blockchain integration in the economy.
Since its inception, bitcoin has been one of the fastest growing but most volatile investable assets in the world. $1 invested in bitcoin in July, 2010 would be worth more than $320,000 at bitcoin’s height in December, 2017.
However, bitcoin has since fallen more than 60% since last year’s record highs.
As to whether or not the Federal Reserve would embrace digitcal currencies, Yellen said she thinks it is an unlikely scenario. She added that the enthusiasm for a digitcal current at the central bank during her tenure was “not very high.”
Yellen noted that a central bank digital currency would leave the global system of payments vulnerable to terrorism and become “an obvious target for cyberattacks.”