Former US Federal Deposit Insurance Corporation (FDIC) Chairperson Sheila Bair has recently commented that the Bitcoin policies created by governments should protect the investors rather than ‘feed the frenzy’ over the cryptocurrencies. The opinion comes from Bair’s op-ed article published on Yahoo Finance this Tuesday.
The former chair further explains that Bitcoin should not be prohibited just for the reason that it has “no readily-apparent intrinsic worth.”
In her article, Bair also said that governments should ensure that policies covering digital currencies shouldn’t feed the frenzy and should not make their own value judgments about Bitcoin.
“Instead of making its own value judgments about Bitcoin, what government should do is first make sure our policies don’t feed the frenzy.”
The fiat currencies in circulation today have also experienced the same predicament that Bitcoin is in at present, Bair claims. According to her, the fiat currencies were created by societies in order to meet the need by the people of a medium to trade and that relied ‘more on psychology than physical attributes.’
“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 that a government should focus on making sure that a fair and well-informed market is established. A market that is free from fraud, manipulation and outsized speculation.
The former FDIC chair’s show of support to Bitcoin is not surprising since she currently serves as an independent advisor and director of several Blockchain and virtual currency projects.
Her views, however, are still notable due to her stint at FDIC, an agency that was established by the US Congress to maintain financial confidence and stability.