In an interview with Barron’s, Sheila Bair, former chairperson of the Federal Deposit Insurance Corporation (FDIC), has opined that cryptocurrencies should not be banned. Ms. Bair argued that cryptocurrencies and Bitcoin may lack intrinsic value, but its case is not unique.
Between 2006 and 2011, Sheila Bair led FDIC – organization responsible for insuring bank deposits in the US. As the 19th Chair of the organization, she assumed a prominent role in the government’s response to the 2008 financial crisis.
She is now serving as an independent advisor and director of several blockchain and cryptocurrency related projects, including the startup Paxos.
While speaking to Barron’s regarding intrinsic value of cryptocurrencies, Sheila Bair said
“I don’t think we should ban it – the green bills in your pocket don’t have an intrinsic value, either.”
She had voiced her support in favor of Bitcoin and cryptocurrencies in the past. According to Sheila Bair, the government should protect investors’ interests, and leave the issue of valuation to markets. In an article published in Yahoo Finance in December 2017, Sheila Bair was quoted as saying
“Instead of making its own value judgments about bitcoin, what government should do is to first make sure our policies don’t feed the frenzy.”
While discussing about market valuation, Sheila Bair said “Let the market figure out what it’s worth. That is what it is doing now.”
Ms. Bair further stated that regulators should ensure that the technology is not used for illegal activities and encourage disclosure. Finally, she also offered a piece of valuable suggestion to investors. Sheila Bair said “Don’t invest money which you cannot afford to lose.”