Yellen: 'I will just say outright I am not a fan' of bitcoin


Janet Yellen, the former U.S. Fed chair, would like to tell you why she doesn't like bitcoin. "Very few transactions are actually handled by bitcoin," she said at the Montreal Fintech Forum Monday. "Many of those that do take place in bitcoin are illegal, illicit transactions." This often-repeated claim about the association to terrorism and money laundering has actually been fairly well debunked.

But Yellen had more to say from the classic "bitcoin is bad" playbook. 

  • Questioned bitcoin as a "stable source of value", calling it "anything but"
  • Noted bitcoin is slow in handling payments and has "difficulties because of its decentralized nature" 
  • Pointed out the high energy use of bitcoin and its associated cost
  • Worried that trust on the network could break down

"I don't think they serve as very effective forms of currency or stable sources of value," Yellen said of cryptos. But she wasn't done. She worried about digital, anonymous money being used by nefarious actors, comparing it to already anonymous cash.

"Digital currency provided by the Federal Reserve could become very attractive," Yellen did say, for deposits. But she worried there could be second-order, financial-stability of it actually being used. In short, the former Fed chair doesn't see bitcoin or cryptocurrency as the future of money. But of course, she isn't alone in that regard. (Source: Francis Pouliot/Twitter)

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Oct 20, 2021, 2:23PM UTC