BTC Wires

Former Chair Of Federal Reserve Criticises Crypto’s Decentralized Nature

Janet Yellen, who has served as a former chair of the Federal Reserve, recently spoke in an event where she did not hold back on her criticism of cryptocurrency.

She has served as the Chair of the Federal Reserve from 2014 to 2018 and before that she served as the vice chair of the Reserve under President Obama’s tenure.

On Monday, she spoke at an event called the ‘2018 Canada FinTech Forum’ which was held in Montreal.  At that event, Yellen had a lot to say regarding the utility of bitcoin and how it is hampered by the decentralized nature of the cryptocurrency:

She said:

“It has long been thought that for something to be a useful currency, it needs to be a stable source of value, and bitcoin is anything but. It’s not used for a lot of transactions, it’s not a stable source of value, and it’s not an efficient means of processing payments. It’s very slow in handling payments. It has difficulty because of its very decentralized nature.”

While crypto is still in a blooming stage of its development, it sure has taken the world by storm and has captured everybody’s attention. The supporters of crypto agree that despite being in an early-stage, the technology is definitely viable and has the potential to overturn existing systems of currency.

On the note of it being called ‘slow’ in handling payments, developers believe that second-layer technologies like Lightning Network(LN) has the potential to accelerate the network’s ability to send and receive transactions quicker and on a more mammoth scale. That could ensure that BTC becomes a currency that can be used in one’s daily life.

Yellen has previously expressed her disapproval of digital currency. In December last year, she criticised bitcoin as a “highly speculative asset” with a “very small role” in the financial system. Shortly after that, bitcoin’s price reached an all time high near $20,000.

Back then she said:

“I would simply say that Bitcoin at this time plays a very small role in the payments system. It is not a stable store of value and it doesn’t constitute legal tender. It is a highly speculative asset.”

Yellen makes a fair point when she says that as a representative of an entire class of currency, bitcoin sure is volatile and not suitable to be considered as a payment system for daily use.

After her tenure ended in 2018 February, Trump appointed Jerome Powell as her successor., He too has spoken on similar lines and has warned lawmakers against the risky nature of cryptocurrency, earlier this year.