Microsoft founder Bill Gates once called bitcoin (BTC) a “kind of a pure ‘greater fool theory’ type of investment.” Investor Warren Buffett went further, calling the cryptocurrency “probably rat poison squared.”
Now you can add the former chair of the U.S. central bank, the Federal Reserve, to the roster of bitcoin skeptics.
“I will just say outright I am not a fan, and let me tell you why,” said Janet Yellen during this week’s Canada Fintech Forum.
“I know there are hundreds of cryptocurrencies and maybe something is coming down the line that is more appealing,” she said, as quoted by CoinDesk, “but I think first of all, very few transactions are actually handled by bitcoin, and many of those do take place on bitcoin are illegal, illicit transactions.”
She added, “It is one … thought that for something to be a useful currency, it needs to be a stable source of value, and bitcoin is anything but. So it’s not used for a lot of transactions, it’s not a stable source of value and it’s also not an efficient means for processing payments. It’s very slow in handling payments.”
According to CoinDesk, that didn’t sit well with bitcoin supporter Francois Pouliot, who posted a video of what he called Yellen’s “rant” on Twitter.
Janet Yellen: "I am not a fan of Bitcoin. Let me tell you why".
Former Central-Banker-in-Chief proceeds to meticulous 5-minute rant against Bitcoin, robotically spewing scripted FUD talking points to Finance/Bank VIPs.
They're scared. Buy Bitcoin.⚡https://t.co/kEvUlwUZfc
— Francis Pouliot (@francispouliot_) October 30, 2018
It’s not as if what Yellen is saying is anything new or unexpected. Plenty of regulators, starting with the Securities and Exchange Commission, have been uneasy about bitcoin and other cryptocurrencies. Back in 2017, while still running the Fed, Yellen described bitcoin as a “highly speculative asset” in testimony before Congress.
She opposes the idea of a central bank issuing a cryptocurrency, too, saying it “could have negative impacts on financial stability.”