Janet Yellen critiques Bitcoin as 'extremely inefficient' for making transactions

U.S. Treasury Secretary Janet Yellen critiqued Bitcoin’s energy consumption and transaction utility during a New York Times event on Monday.

In her remarks, according to quotes published by The Times today as part of its DealBook DC Policy Project event, Yellen said that “I don’t think that Bitcoin is widely used as a transaction mechanism."

"It’s an extremely inefficient way of conducting transactions, and the amount of energy that’s consumed in processing those transactions is staggering," she was quoted as saying.

On the subject of central bank digital currencies or CBDCs, Yellen said that many questions remain, including the impact on monetary policy and how the Fed would interact with retail users.


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She was quoted as saying:

“What would be the impact on the banking system? Would it cause a huge movement of deposits out of banks and into the Fed? Would the Fed deal with retail customers or try to do this at a wholesale level? Are there financial stability concerns? How would we manage money laundering and illicit finance issues? There’s a lot of things to consider here, but it’s worth looking at."

Confirmed as Treasury Secretary on January 25 this year, Yellen’s remarks today resemble her previous stance on crypto. Back in 2018 at the Montreal Fintech Forum, Yellen said: “I am not a fan” of Bitcoin, stating that it isn't a “very effective form of currency or stable sources of value."

In her testimony to the U.S. Senate for her confirmation as Treasury Secretary, Yellen said that Bitcoin and other cryptocurrencies offer “potential benefits for the U.S. and our allies” and could “improve the efficiency of the financial system.” 

About Author

MK Manoylov has been a reporter for The Block since 2020 — joining just before bitcoin surpassed $20,000 for the first time. Since then, MK has written nearly 1,000 articles for the publication, covering any and all crypto news but with a penchant toward NFT, metaverse, web3 gaming, funding, crime, hack and crypto ecosystem stories. MK holds a graduate degree from New York University's Science, Health and Environmental Reporting Program (SHERP) and has also covered health topics for WebMD and Insider. You can follow MK on X @MManoylov and on LinkedIn.