Former Fed Chairman Ben Bernanke: Bitcoin has serious problems

     Former U.S. Federal Reserve Chairman Ben Bernanke offered both praise and criticism when discussing bitcoin in a new interview, suggesting that government regulation of blockchain transactions could be a response to perceived risks.

     In an interview with financial news website Quartz, Bernanke said that "bitcoin is interesting from a technical perspective," and pointed to broader developments in the emerging payments sector.

     “We’re in a world where payment systems are evolving rapidly, new ways of managing payments are proliferating, and some of the ideas around Bitcoin are certainly valid,” he told the publication.

     But the praise ends there. Bernanke continued:

     “But I think Bitcoin itself has some serious problems. First, it has not demonstrated a stable source of value. Its price has been extremely volatile, and it has yet to establish itself as a widely accepted medium of exchange.”

     He went on to say that government officials are likely to increase regulation of digital currency activities, emphasizing Bitcoin’s anonymity while noting its role as a “medium for engaging in illegal transactions, drug sales or terrorist financing.”

     “You know, governments are not happy to allow this kind of activity to happen, so I suspect there will be regulation of bitcoin or similar currencies in the future, and then bitcoin will be less attractive,” he said in an interview.

     Two years before these comments, Bernanke wrote a letter to Congress highlighting the possible benefits and risks of digital currencies.