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Yellen warns that Bitcoin is “extremely inefficient”



Yellen, U.S. President-elect Biden’s nomination as Secretary of the Treasury, said that Biden announced the nomination and served as his economic policy team at his transitional headquarters in Wilmington, Delaware, USA, 2020 December 1 of the year.

Leah Millis | Reuters

Treasury Secretary Janet Yellen warned on Monday that Bitcoin poses a danger to investors and the public.

Although the price fell sharply this week, the cryptocurrency continued to trade above $53,000 due to various sources. Elon Musk̵

7;s Tesla recently made a large number of purchases and said it will accept Bitcoin for transactions.

However, Yellen said that there are still important questions about legality and stability.

She told CNBC’s Andrew Ross Sorkin at the New York Times “DealBook” conference: “I don’t think Bitcoin… is widely used as a trading mechanism.” “To some extent, I am worried that it is usually used for illegal financing. This is an extremely inefficient way of conducting transactions, and processing these transactions consumes incredible energy.”

Mining Bitcoin requires users to use powerful computer settings to solve complex mathematical equations. According to Digiconomist, the annual carbon footprint of the electricity used in this process is equal to New Zealand.

In addition to consumption issues, Bitcoin is also considered a tool for people involved in many illegal activities because its use is difficult to track.

Then there is volatility, because the price of cryptocurrency has seen rapid peaks and troughs during its existence.

Yellen said: “This is a highly speculative asset, I think people should be aware that it can be very volatile, and I do worry about the potential losses that investors may suffer.”

Various government agencies have considered the idea of ​​making an alternative digital currency, hoping that it can open the global payment system to those who have no right to use it.

The Federal Reserve, chaired by Yellen, has studied the issue and discussed the possibility of using a new digital currency and a payment system that is expected to be launched in the next few years.

Yellen said: “I think this may lead to faster, safer and cheaper payments, which is my important goal.”


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