Bitcoin continues to grow in value and set records, but US Treasury Secretary Janet Yellen is not as big as top digital currency investors.
Yellen reiterated his concerns about bitcoin many times on Monday, saying it is a highly speculative, “inefficient” form of digital currency that is often used for illegal transactions.
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Since taking over from the Treasury last month, the former chairman of the Federal Reserve has made it clear that his department will take a hard look at bitcoin and how it is used as part of an effort to protect investors. She suggested that there may be more government regulations.
“People should beware that it can be extremely volatile and I’m worried about the potential losses that investors could suffer,” she said in an interview with the New York Times’ Dealbook. She previously described bitcoin as “highly speculative”.
Bitcoin, the most popular digital currency, has grown in the last year and surpassed for the first time the market value of 1 trillion dollars. The sharp rise has attracted more interest and investors, including from some large and well-established companies.
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fell short in value after Yellen’s remarks.
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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 trade,” Yellen said.
The Secretary of the Treasury was also concerned about the ability of bitcoin to be used for money laundering and other forms of illegal activities. “I’m afraid it’s often for illicit financing,” she said.
A major study indicated that only a small percentage of Bitcoin transactions are used in illicit transactions, however, and proponents have pointed out that the same is true for the dollar. The US has considered eliminating the $ 100 bill, for example, because studies suggest it is preferred by criminals.
Despite these concerns, Yellen also acknowledged that digital currencies are here to stay and that a “digital dollar” might 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, more secure and cheaper” method of exchanging money, especially for people without bank accounts and the like.
“Too many Americans don’t have access to easy payment systems,” Yellen said.
Consider recent federal incentive checks. The establishment of a digital dollar could have allowed the government to send every American a check directly on their mobile phone or personal account in an instant.
Instead, some payments took a few weeks to reach recipients by mail or bank deposits. And others who were eligible never received the money.