Sheila Bair, former head of the U.S. Federal Deposit Insurance Corporation (FDIC), believes Bitcoin, like the US dollar, has no intrinsic value, while the guarantee of the former is people’s faith.
In her interview to Barron’s former FDIC chair Sheila Bair stated she sees no need to outlaw cryptocurrencies. Bitcoin might not have intrinsic value, but neither does the dollar.
“I don’t think we should ban it — the green bills in your pocket don’t have an intrinsic value, either. The value is based on what others think is its value. That’s true of any currency,” she said.
Last December Bair already shared her thoughts on traditional currency, saying that in the past its worth depended “more on psychology than physical attributes,” writes CoinDesk. Bair has taken part in several cryptocurrency projects as independent advisor and director. She sits on the board of directors of a blockchain venture, Paxos.
The ex-chief of a federal agency criticised virtual money before for the lack of intrinsic value. But as for traditional currencies, Bair sees their merit in the acceptance by all market players.
“Since the beginning of commerce, humans have assigned value to things of no readily-apparent intrinsic worth. Particularly in the case of mediums of exchange, a.k.a. currency, we assign value simply because those with whom we transact do so as well,” Bair added.