It was indeed an interesting talk by the former head of the Federal reserve. Speaking at the Ripple swell conference being held in Toronto, Ben Bernanke appears to have taken quite a bullish tone towards blockchain. He also made it known that he thinks current methods of payment (Swift) are quite slow and can be cumbersome.
Ben Bernanke is well known for his time leading the Fed when the US and the global economy were going through general market turmoil as a result of the global financial crisis. He is now a fellow at the Brookings institute.
Ripple to the Rescue
Bernanke did, however, see Ripple as one of the most interesting solutions to the payment problems. He said that he had in fact read about the work that Ripple was doing and that it will be one of the most efficient ways of reducing cost, increasing speed and improving the accuracy.
Although the conversation mostly focused on Economics and the role of central banks, there were a few participants that were interested to hear his view on Bitcoin. Indeed, it could have been easy to have guessed his response given the previous comments he has made about it. He made the following summary of his assessment of Bitcoin tech:
bitcoin is meant to be an attempt to replace fiat currencies and evade government regulation and government intervention
He said that although Bitcoin appears to be doing quite well and is being touted by a number of high profile investors, the threat they pose to governments cannot be ignored. He said that governments will take whatever steps they can to try and neuter this threat.
Bullish on Blockchain
Although Bernanke had this view on decentralised Bitcoin, he was in favour of those companies that worked together with regulators to find a solution to global payments as more likely to succeed. He pointed to the recent interest that has been shown by central banks to Blockchain technology.
An interesting example of this was the comments out of the Federal Reserve bank of Boston who claimed that the fintech startups that are pushing the boundaries on blockchain are likely to be a challenge to the status quo as well as the established incumbents.
Bernanke did not think that the advent of this digital currency would affect the current state of monetary policy in the world. He said:
It could be a lack of imagination, but I don’t think monetary policy has changed that much. [Central banks] are supportive of these new technologies because they’ll improve the payment system … but it won’t affect the ability of the Fed to require a certain amount of reserves of affect interest rates
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