Treasury Secretary Janet Yellen said Monday that Bitcoin is an “extremely inefficient way of conducting transactions.”
Despite growing acceptance by institutions such as Mastercard and Tesla, Yellen said she believes the world’s largest cryptocurrency still poses risks for investors and the general public.
“I don’t think that bitcoin … is widely used as a transaction mechanism,” she told CNBC’s Andrew Ross Sorkin at a New York Times DealBook conference. “To the extent it is used I fear it’s often for illicit finance. It’s an extremely inefficient way of conducting transactions, and the amount of energy that’s consumed in processing those transactions is staggering.”
In addition to its environmental toll and potential to be used in unlawful ways, Yellen said Bitcoin carries stability concerns. Since its inception, the cryptocurrency has proven to be extremely volatile. Yellen said that despite gaining new support from large companies, that volatility is still a risk that should be feared by investors.
“It is a highly speculative asset and you know I think people should be aware it can be extremely volatile and I do worry about potential losses that investors can suffer,” she said.
The Federal Reserve, where Yellen once served as a chair, has said the world could see an alternative digital currency and payments system rolled out in the next several years.
“I think it could result in faster, safer and cheaper payments, which I think are important goals,” Yellen said.