Bank of Korea Governor Bashes ‘Volatile’ and ‘Invaluable’ Bitcoin
Lee Ju-yeol, South Korea’s central banking chief, has slammed Bitcoin for its volatility. Several policymakers have also criticized Bitcoin, following a week of extreme volatility in the asset’s price.
Despite its incredible start to 2021, Bitcoin has yet to convince several skeptics in the traditional finance space of its potential.
Lee Ju-yeol, the Governor of the Bank of Korea, has voiced skepticism over the asset’s long-term price trajectory as he believes a significant pullback is on the horizon.
Market Correction to Expose Bitcoin Again
This week, local news source Yohanp reported that Lee had bashed cryptocurrencies, explaining that they generally lack any intrinsic value. Speaking at the National Assembly, the policymaker explained that Bitcoin’s recent outback would most likely trigger a much broader market correction, keeping in line with Bitcoin’s ever-present volatility issue.
Lending his thoughts to Bitcoin’s rally to kickstart the year, Lee explained that several factors had primarily led to the event. The policymaker pointed to concerns over ballooning inflation in the traditional financial space, economic instability, and the growing desire for Bitcoin from institutional investors.
Given that Bitcoin is primarily functioning as a hedge asset, there is every reason to believe that its price will begin to cool as the traditional market finds its footing once again.
Despite his views on cryptocurrencies, Lee has asserted that the Bank of Korea will progress with its mission to launch a Central Bank Digital Currency (CBDC). Per the Korea Times, Lee confirmed that the central bank is now reviewing relevant technologies and available designs that will form the CBDC’s framework.
Yellen Continually Hammers Bitcoin
Lee Ju-yeol isn’t the only person bemoaning cryptocurrencies’ volatility. The problem has been brought into focus once more this week. Bitcoin lost over 20 percent of its value despite rising to a new all-time high and a trillion-dollar market capitalization last week.
Despite the asset consolidating and retaking the $50,000 price peg at press time, several regulators have criticized it once more. On Tuesday, Janet Yellen, the United States Treasury Secretary, bashed Bitcoin’s volatility and other problems while in an interview.
Speaking with CNBC’s Andrew Ross Sorkin at a New York Times event, Yellen reiterated her argument that Bitcoin continues to see applications in illicit transactions.
“I don’t think that bitcoin … is widely used as a transaction mechanism. 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.”
As for its volatility, Yellen asserted that Bitcoin’s volatility is beginning to rear its head again. Thus, she worries that investors might end up losing a great deal of money when the market correction is over.
Yellen has been vocal about her disdain for Bitcoin’s criminal applications. While the policymaker believes that it could help improve the financial system’s efficiency, she also worries that investor action and Bitcoin’s susceptibility to wild price swings could hurt more people than it helps.
For now, there have been no signs of how Yellen plans to incorporate Bitcoin regulations. Like many Biden administration members, she remains committed to building the American economy following the coronavirus. However, many believe that the crypto industry could get its first dose of regulations under her watch.