Former FDIC Chair Argues against Banning Bitcoin

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Sheila Bair, former director of the U.S. Federal Deposit Insurance Corporation (FDIC), recently argued that bitcoin shouldn't be banned because of its "lack of intrinsic value." Instead, the government should ensure a well-informed market, free from fraud, manipulation. and speculation.

In an op-ed piece for Yahoo Finance, Bair initially pointed out that bitcoin is a bubble, given its meteoric rise this year, and that it's hard for regulators to know what to do given that they "know people are going to lose a lot of money." Disagreeing with the "ban bitcoin" rhetoric, she argued money has historically depended "more on psychology than physical attributes."

She wrote:

"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, aka currency, we assign value simply because those with whom we transact do so as well."

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