Bitcoin continues to increase in value and set records, but U.S. Treasury Secretary Janet Yellen is not as high as leading digital currency investors.
Yellen reiterated Monday his often-expressed concerns about bitcoin, saying it is a highly speculative and “inefficient” form of digital currency that is often used for illegal transactions.
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Since the Treasury took office last month, the former Federal Reserve chairwoman has made it clear that her department will give a hard look to Bitcoin and how it is used as part of an effort to protect investors. He has hinted that there are likely to be more government regulations.
“People need to be careful that it can be extremely volatile and I am concerned about the potential losses that investors may suffer,” he said in an interview with the New York Times ’Dealbook. Previously, he characterized bitcoin as “highly speculative.”
Bitcoin, the most popular digital currency, has skyrocketed over the past year and surpassed $ 1 trillion in market value for the first time. The sharp rise has attracted more interest and investors, including some large, well-established companies.
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fell in value briefly after Yellen’s statements.
See also: Is Bitcoin heading to $ 100,000 in 2021 or is its price “unsustainable”?
Despite its popularity, digital currency is not yet widely used as a payment mechanism between buyers and sellers.
“It’s an extremely inefficient way to conduct transactions,” Yellen said.
The Secretary of the Treasury has also been concerned about the possibility of bitcoin being used for money laundering and other forms of illegal activities. “I’m afraid it’s often about illicit funding,” he said.
A major study indicated that only a small percentage of Bitcoin transactions are used in illicit transactions, but supporters also noted that the same goes for the dollar. The U.S. has considered eliminating its $ 100 bill, for example, because studies suggest criminals prefer it.
Despite these concerns, Yellen also acknowledged that digital currencies are here to stay and that a “digital dollar” may be a good idea. The Fed is already studying the issue.
Like Venmo or Paypal, a digital dollar and a related payment system would provide a “faster, safer, and cheaper” method of exchanging money, especially for people without bank accounts and the like.
“A lot of Americans don’t really have access to easy payment systems,” Yellen said.
Think about recent federal stimulus checks. The establishment of a digital dollar could have allowed the government to send all Americans a check directly to their cell phone or personal account in a jiffy.
Instead, some payments took weeks to reach recipients via email or bank deposits. And others who were eligible never got their money.