Former U.S. Federal Reserve Chairman Ben Bernanke told CNBC Monday morning that he doesn't believe Bitcoin (BTC) will work as money, a store of value or digital gold.
"If Bitcoin were a substitute for paper money, you could buy groceries with Bitcoin," he said. "Nobody buys groceries with Bitcoin because it's too expensive and too inconvenient," he added, noting that it would be impossible to price something like celery in Bitcoin because the value is too unstable.
Occasionally known as "Helicopter Ben" for blithely suggesting in 2002 that the Fed could simply drop money from helicopters to stave off deflation - a remark no doubt familiar to the cypherpunks who laid the groundwork for Bitcoin - Bernanke then moved on to digital gold for the popular cryptocurrency. "Gold has an underlying use value," he argued. "It can be used to fill voids. The underlying use value of a bitcoin is to make ransomware or something like that."
On monetary policy, the man who launched the original zero interest rate policy (ZIRP) and quantitative easing (QE) criticized the current Fed for not moving fast enough to tighten monetary policy in the face of advancing inflation.
Even in a "favorable scenario," Bernanke said he expects the economy to slow and unemployment to rise, even if inflation remains high. "You could call it stagflation."