U.S. Treasury Secretary Janet Yellen has warned about the dangers of bitcoin as the price of the cryptocurrency took a nosedive. She sees bitcoin as a highly speculative asset and is worried about potential losses investors can suffer. Yellen also believes that bitcoin is not widely used as a transaction mechanism due to its inefficiency, reiterating her view that the cryptocurrency is often used for “illicit finance.”
Janet Yellen’s Warning About Bitcoin
Janet Yellen has blasted bitcoin again Monday in an interview with CNBC at the New York Times Dealbook conference. The treasury secretary “issued a warning about the dangers that bitcoin poses both to investors and the public,” the news outlet conveyed.
Regarding bitcoin, Yellen was quoted as saying:
It is a highly speculative asset and you know I think people should be aware it can be extremely volatile and I do worry about potential losses that investors can suffer.
The price of bitcoin started falling sharply Sunday afternoon, dropping almost 18% from the high of above $58K to $47,827 at the time of writing, based on data from markets.Bitcoin.com. Its market capitalization has fallen below $1 trillion.
BTC’s price chart showing prices between Feb. 17 and Feb. 23. Source: markets.Bitcoin.com.
The treasury secretary further opined:
I don’t think that bitcoin … is widely used as a transaction mechanism. To the extent it is used, I fear, it’s often for illicit finance.
“It’s an extremely inefficient way of conducting transactions, and the amount of energy that’s consumed in processing those transactions is staggering,” she added.
Many bitcoiners bashed Yellen’s remarks on social media, accusing the treasury secretary of not understanding bitcoin and advising her to do some research before making statements on the subject.
“Sec Treasury Janet Yellen states: ‘Bitcoin is extremely inefficient,’” Rich Dad Poor Dad author Robert Kiyosaki commented. “Give me a break. Does she think printing trillions of fake dollars is efficient? Does she not know the more fake dollars she prints the more efficient and valuable bitcoin becomes? God bless her.”
During the same interview, Yellen also touched on the subject of central bank digital currencies. The Federal Reserve has said that it is studying the digital dollar, which could roll out over the next several years. Yellen said: “I think it could result in faster, safer and cheaper payments, which I think are important goals.”
The treasury secretary has talked about bitcoin and cryptocurrencies several times since her Senate confirmation hearing in January. She has promised to work with other federal regulators to implement effective regulation for cryptocurrency. Claiming that the misuse of cryptocurrencies is a growing problem, she stressed last week the importance of regulating institutions that deal in bitcoin to make sure that they adhere to their regulatory responsibilities.
What do you think about Janet Yellen’s remarks about bitcoin? Let us know in the comments section below.
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