In the last few months, there has been a lot of discussion regarding the possibility of using Bitcoin as an alternative form of currency due to the growing prices of energy and food as well as the larger consequences of inflation generally, including concerns of a recession.
Speaking with CNBC’s Andrew Ross Sorkin, the former Federal Reserve Chairman Ben Bernanke, discussed whether or not he believes the U.S. is in for a recession and whether crypto can substitute as an alternate form of money.
Regarding crypto the former Fed head stated:
“Bitcoin and other currencies whose value changes minute to minute have been successful you see the downside of that right now. But, they were intended to be a substitute for fiat money. In that respect, they have not succeeded. if they’re a substitute for fiat money, you can use your Bitcoin to buy groceries, nobody does that because it is too much convenience.”
“The main use of Bitcoin is mostly for underground economy activities and things that are illegal and elicit. I don’t think Bitcoin will take over an alternate form of money.”
Is Bitcoin digital gold?
On the idea of being a store of value or some kind of version of digital gold well, the former Fed Chair elaborated:
“As I said it is a speculative asset. Bitcoin could be subjected to a lot more regulation, and the enmity is also at risk at some point so investors in Bitcoin should be aware of that.”
However, Anthony Pompliano, a renowned advocate of Bitcoin, remarked that Bernanke has a bias and that his views are “just factually inaccurate.” Pompliano said that Bernanke used to be an insider of the Federal Reserve and is thus an insider of the ‘money printing machine.’
Regarding the statement that most of the Bitcoin activity is for illicit purposes ‘Pomp’ argued:
“We have people like the former acting director of the CIA who’s gone onto the blockchain analyze the transactions and come out to an estimation that point four percent of all transactions are for nefarious or illicit purposes.”
Last but not least, Pomp made the case for using Bitcoin at the supermarket to purchase goods there as well as top retailers from Shopify all the way down to Starbucks, Walmart, and McDonald’s, so he is confused about exactly where Ben Bernanke wants people to be able to spend Bitcoin.
Watch: Former Fed Chair says Bitcoin will note become an alternative form of money