Former Federal Reserve Chairman Ben Bernanke said on CNBC on Monday that Bitcoin will not replace cash as an alternative form of payment. Bernanke notes that it was designed to function as a substitute for fiat money, but it has failed to do so.
According to a prominent American economist, nobody uses Bitcoin to purchase groceries because it is “too pricey” and “too inconvenient.”
According to Bernanke, pricing goods in Bitcoin would be a tremendous difficulty since its value fluctuates significantly from day to day. The former Fed chair is certain that Bitcoin is largely used for illegal or criminal purchases in the subterranean economy.
According to Bernanke, Bitcoin has no underlying value since it is not used in dentistry or other businesses. “The underlying use value of Bitcoin is for ransomware or something like that,” he said.
Bernanke, who resigned as Fed chairman in 2014, was in charge of the central bank’s response to the 2007-2009 financial crisis. He is most known for instituting near-zero interest rates and quantitative easing to combat the Great Recession.
After the pandemic hit the US economy in 2020, Bernanke suggested testing it with negative interest rates, but the Fed did not go that far. Bernanke also bailed out failing Wall Street firms and institutions, preserving the corporate debt market.
In his most recent interview, he criticised the Federal Reserve for taking too long to react to out-of-control inflation.
