Former president of the United States FDIC: bitcoin should not be banned

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Sheila Baer, the nineteenth president of the United States Federal Deposit Insurance Company, wrote on Tuesday that bitcoin should not be banned. The article excerpts are as follows:

has risen nearly 2000% in a year, and it has recently fallen sharply, all of which have prompted a special warning from regulators.

for regulators, it is painful to find a precarious asset bubble (any asset rising by 2000% in less than a year). They know that the bubble will be disillusioned. They know that people will lose money. But what should they do?

some people believe that bitcoin does not play a role in society and should be banned. But like beauty, bitcoin has a value in the eyes of the holder.

, at the beginning of the rise of business activities, human beings have endowed something with no obvious intrinsic value at any time. In particular, the reason for the value of the transaction medium, that is, the currency, is only because it is better to deal with it. Whether the shells of ancient India or the thin green paper that many of us put in our wallets today, their value lies in people's psychological cognition rather than their physical attributes.

"technology is more trusted than the government"

is the same for the legal currency, even if the legal currency has the government and its tax rights, and the central bank and its banknote printing rights as a guarantee. When the public lost their trust in these institutions, just like after the first World War, the government of the Republic of Weimar or the governments of Southeast Asian countries lost their trust in 1990s, the value of legal money evaporated. Indeed, for some investors who rely more on technology than the government, it is more valuable because bitcoin lacks the support of the central bank.

acknowledged that bitcoin as a medium of exchange of individuals and businesses so many, enough to expose the underlying behavior for trying to be worthless. The prospect of bitcoin, which is ultimately widely accepted and allowed to conduct direct P2P transactions worldwide, has a strong appeal.


, unlike the legal tender, the supply of bitcoin is limited, and it is severely restricted by the speed of mining, making it a valuable means of storage for many people, which is similar to gold.

admittedly, the market value of bitcoin today seems far more than the intrinsic value of these uses. But this is not the first time that the market is generally overpriced for a certain asset value. Holland did not ban tulips when the tulips bubble burst in Holland in 1630s, and technology stocks were not banned when the tech stock bubble burst in 2000s.

has its own value judgment compared to the contrast of special currency. What the government should do is to make policy not to fuel market crazily. Of course, the bank organizations involved in federal insurance should not allow direct or indirect support for bitcoin speculation. The government should also take measures to ensure the pricing of bitcoin, regardless of market value, reflecting the decision made by investors after obtaining full information, not being fraudulent or manipulated, and trading activities are not used to subsidize illegal activities. Fortunately, the regulators have taken positive measures in these areas.

, by contrast, the Asia Pacific countries are not very welcome to encrypt money, and many institutions have issued the strongest warning.

China -- hope to control

in an all-round way

China quickly banned the encrypted currency. In September this year, the authorities issued a ban on trading bitcoin and ICO. The people's Bank of China said that unregulated markets could bring major financial risks to the world's second largest economy.

the government actually supports the use of digital money, although China has taken a tough stance on privately issued, decentralized virtual currencies. The people's Bank of China says it is considering issuing China's own sovereign digital currency and has set up a special team for it.

Japan - Taking the lead in legalizing bitcoin

in April this year, the Japanese parliament approved the use of bitcoin and other encryption currency payment, September officially recognized 11 encryption currency exchange operator. However, the country has not yet planned to issue its own digital currency.

recently, the Bank of Japan also issued a warning of a rapid rise in the price of the currency. Kuroda Higashihiko, the governor of the central bank said on Thursday that bitcoin prices were soaring "abnormal". Bitcoin is being used for investment or speculation, rather than playing the function of payment or settlement means.

India - worry about the illegal use of

the Central Bank of India has repeatedly warned that there is a risk of virtual currency transactions. The country's regulators are also worried that the encrypted currency may be used for tax evasion, money laundering or terrorist financing.

last week, India's authorities expanded a survey of possible illegal acts related to encrypted currencies.

Korea - monitoring financial institution

South Korea has banned its financial institutions from engaging in virtual currency transactions, including buying, holding or holding them as collateral.

From: 美国FDIC前董事长:比特币不应被禁
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