Former Federal Reserve chairman, Ben Bernanke, believes the technology behind Bitcoin is interesting, but threats from terrorists make it a problematic payment solution. Anonymity is a “bug,” he claims.
In an interview with Quartz, published November 19, Ben Bernanke opened up about Bitcoin.
“It’s interesting from a technological point of view. We’re in a world where the payments system is evolving quickly and new approaches to managing payments are proliferating, and some of the ideas around bitcoin will no doubt be useful in doing that,” the former Federal Reserve chairman stated.
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“But I think bitcoin itself has some serious problems,” he opined. “The first is that it hasn’t shown to be a stable source of value. Its price has been highly volatile and it hasn’t yet established itself as a widely accepted transactions medium.”
For him, those are not the main problems.
“But the real serious problem that it has is it’s anonymity, which is a feature, and is also a bug, in that it has become in some cases a vehicle for illicit transactions, drug selling or terrorist financing or whatever,” he laments. “And you know, governments are not happy to let that activity happen, so I suspect that there will be oversight of transactions done in bitcoin or similar currencies and that will reduce the appeal.”
The interview is published amid a changing European Union stance on the crypto-currency in the wakes of the Paris Attacks last week.
European Union interior and justice ministers organized a crisis meeting for Friday- one week after the Paris Attacks – to plan for regulation and monitoring of alternative payment methods offered by virtual currencies, such as the crypto-currency Bitcoin.
The emergency meeting takes place Friday in Brussels, Belgium and will investigate controls for such payment mediums.
According to a draft obtained by Reuters, ministers will propose new measures designed to,
…strengthen controls of non-banking payment methods such as electronic/anonymous payments and virtual currencies and transfers of gold, precious metals, by pre-paid cards.
According to the draft documents, EU ministers will aim to “curb more effectively the illicit trade in cultural goods.”
According to Der Spiegel, a G7 meeting scheduled to start Monday in Turkey will also explore how to strengthen control over virtual currencies like Bitcoin.
Featured image from Shutterstock.