Bitcoin’s value continues to rise and break records, but U.S. Treasury Secretary Janet Yellen is not as high as investors in the main digital currency.
Yellen on Monday repeated his frequently stated 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 taking over the Treasury last month, the former Federal Reserve chairman has made it clear that her department is going to take a look at bitcoin and how it is used as part of an effort to protect investors. She hinted that more government regulation is likely.
“People should be aware that it can be extremely volatile and I am concerned about the potential losses that investors may suffer,” she said in an interview with the New York Times Dealbook. It previously characterized bitcoin as “highly speculative”.
Bitcoin, the most popular digital currency, soared last year and reached $ 1 trillion in market value for the first time. The sharp rise attracted more interest and investors, including from some large, established companies.
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it fell in value briefly after Yellen’s comments.
See too: Is bitcoin reaching $ 100,000 in 2021 or is its price ‘unsustainable’?
Despite all its popularity, digital currency is still not widely used as a payment mechanism between buyers and sellers.
“It is an extremely inefficient way of conducting transactions,” said Yellen.
The Treasury Secretary was also concerned that bitcoin could be used for money laundering and other forms of illegal activity. “I fear it is often for illicit financing,” she said.
A large study indicated that only a small percentage of Bitcoin transactions are used in illicit transactions, however, and supporters also point out that the same applies to the dollar. The United States has considered eliminating its $ 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” may be a good idea. The Fed is already studying the matter.
Much like Venmo or Paypal, a digital dollar and related payment system would provide a “faster, safer and cheaper” method of exchanging money, especially for people without bank accounts and the like.
“Many Americans don’t really have access to easy payment systems,” said Yellen.
Consider the recent federal stimulus checks. The establishment of a digital dollar could have allowed the government to send each American a check directly to his cell phone or personal account in the blink of an eye.
Instead, some payments took weeks to reach recipients via snail mail or bank deposits. And others who were eligible never received their money.