U.S. Federal Reserve Chair Janet Yellen Downplays Bitcoin
U.S. Federal Reserve Chair Janet Yellen finally revealed her thoughts about Bitcoin. She thinks that the digital currency’s potential risk is limited. Therefore, Bitcoin is incapable of affecting financial markets. Yellen made her comments during her final press conference, on December 13, 2017.
U.S. Federal Reserve Does Not Regulate Bitcoin
Janet Yellen, throughout her tenure as Federal Reserve Chair, had not made many references about the cryptocurrency. However, now that she is about to leave her position, in her last press conference, while announcing an increase in U.S. interest rates, she surprisingly mentioned Bitcoin.
Specifically, Yellen referred to Bitcoin as a “highly speculative asset,” and that “it does not constitute legal tender.” Moreover, she indicated that the cryptocurrency is “not a stable store of value.”
In this regard, she concurs with her colleague New York Fed President William Dudley who also doubts that Bitcoin is a good store of value. According to Bloomberg, last month, Dudley expressed his skepticism about Bitcoin, saying “I would be, at this point, pretty skeptical of bitcoin. I think it’s really more of a speculative activity.”
However, the good news is that Yellen does not seem to view the cryptocurrency as an imminent threat to the U.S. financial system. She declared:
Bitcoin at this time plays a very small role in the payment system.
Central Bankers Are Still Skeptical About Cryptocurrencies
Yellen’s tenure as Fed Chair ends in February 2018. Her comments about the cryptocurrency do not differ from those expressed by her peers.
For example, the Governor of the Reserve Bank of Australia Governor Philip Lowe, referring to Bitcoin’s current “fascination,” said that it “feels more like speculative mania than it has to do with their use” as a form of payment.
Similarly, the European Central Bank chief Mario Draghi also considers that cryptocurrencies are immature. As CNBC reported, Draghi said:
Cryptocurrencies are not ‘mature’ enough to be considered by the European Central Bank (ECB) for regulation.
A few days ago, Former Chairman of the U.S. Federal Reserve Alan Greenspan also dismissed the digital currency. Greenspan said, “Bitcoin is not rational,” and compared it with a fiat currency that the U.S. Continental Congress minted in 1775 to finance the American revolutionary war effort.
Bitcoin and its blockchain technology are a threat to the three-thousand-year-old monetary system and the unfair, obsolete banking system. Understandably, their representatives scorn or downplay cryptocurrencies. And most likely, they will never change their minds. Nevertheless, with a growth of over 1,700 percent in one year, Bitcoin and other cryptocurrencies will continue to grow and eventually challenge the current fiat monetary system.
Do you think that Federal Reserve Chair Janet Yellen’s departure will have an effect on Bitcoin? Let us know in the comments below.
Images courtesy of Reuters/Jonathan Ernst, Wikimedia Commons, Pixabay