Earlier this week, CNBC’s Squawk Box hosted Ben Bernanke, the former chair of the Federal Reserve, who used the podium to underline his opinion that virtual assets have no underlying value and are merely used for "ransomware."
Although Bitcoin proponents often trumpet its ability to be used as a store of value like gold, the former chairman disagreed. "Gold has underlying use value," Bernanke said. "You can use it to fill cavities. The underlying use value of a Bitcoin is to do ransomware or something like that."
The former Fed chair also said crypto was inherently volatile and lacked stability to use as a payment method.
"If Bitcoin were a substitute for fiat money, you could use Bitcoin to go buy your groceries," he said. "Nobody buys groceries with Bitcoin because it’s too expensive and too inconvenient to do that."
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He also highlighted the regulatory uncertainty impacting digital assets and the privacy that might be imperiled if a cascade of regulation goes into effect: “One of the other risks that Bitcoin has is that it could be subject to a lot more regulation, and anonymity is also at risk, I think.”
Bernanke also addressed accelerating inflation in the U.S. and lambasted the government for not tightening monetary policy, citing projections of an impending downturn in the economy and rising unemployment amid high inflation. "You could call it stagflation," he said.