In an interview with Barron’s, former Federal Deposit Insurance Corporation (FDIC) chair Sheila Bair talked about the economy, rising student debt, and among other things, Bitcoin.
Bair started her rebuttal on Bitcoin with some sage investing advice, then immediately switched gears stating that she did not think it should be banned, comparing its value perception to cash.
“...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.”
In a prior interview with Yahoo Finance, Bair was quoted as saying “value - like beauty - is in the eye of the beholder,” and those sentiments have been echoed here.
Bait switches gears to regulation, which she proposes some necessary and reasonable measures:
“Regulation should be focused on good disclosure, education, warding off fraud, and making sure it is not used for illicit activities.”
She ended her comments in what appeared to be reference to the recent cryptocurrency market crash:
“Let the market figure out what it’s worth. That is what it is doing now.”
Bair served as a commissioner on the Commodities Futures Trading Commission and led the FDIC for five years. She has an eye for spotting dangerous economic potential, opposing loosening rules that led to the Enron crisis. The basis of the interview was Bair warning that another financial crisis is coming.
Bair also serves on the board of Paxos, a blockchain startup with a Bitcoin exchange. Her alignment with Bitcoin may be telling in light of the rest of her comments about an impending economic crisis, where she ominously warns of a possible scenario: “we will have 2008 and 2009 again.”