Ben Bernanke, a noted US economist and a former Chairman of United States Federal Reserve has stated that he did not believe that Bitcoin will become an alternative form of money. The reason he provided for his negative outlook on Bitcoin included price volatility and its use in illegal activities.
Ben Bernanke expressed his opinion on Bitcoin and cryptocurrencies while giving interview to CNBC on the state of US economy. He has authored a new book, “21st Century Monetary Policy: The Federal Reserve from the Great Inflation to COVID-19” which is likely to be released in coming days.
Bernanke said, “If bitcoin were a substitute for fiat money, you could use your bitcoin to go buy your groceries. Nobody buys groceries with bitcoin because it’s too expensive and too inconvenient to do that.”
He further said that there was lack of stability in the price movements of Bitcoin and other cryptocurrencies which make them unsuitable for their use in purchase of day to day items.
Bernanke echoed the views of many sceptics of Cryptocurrencies when he said that Bitcoin and other cryptocurrencies are mainly used in illegal activities. He stated, “The main use of bitcoin is mostly for underground economy activities and often things that are illegal or illicit.”
Comparing Bitcoin to gold he said, “Gold has underlying use value, you can use it to fill cavities. The underlying use value of a bitcoin is to do ransomware or something like that.”
Ben Bernanke served and Federal Reserve chair from 2006 to 2014. As Chairman of top government bank, he is credited with successfully responding to the 2008 financial crisis and the Great Recession and putting the US economy back on track.
However, he has criticized the current response of the present Federal Reserve as too slow. He also warned that US is facing stagflation in its eyes.
