Bitcoin Slam: Robert Shiller, Jack Lew And JPMorgan CEO Jamie Dimon Speak Out Against The Virtual Currency

 @SophieXSong
on January 24 2014 10:02 AM
  • RTX17S33
    Robert J. Shiller, Sterling Professor of Economics at Yale University, attends a session at the annual meeting of the World Economic Forum in Davos, Switzerland, Jan. 24, 2014. REUTERS/Denis Balibouse
  • Bitcoin Sept 2013
    Bitcoin enthusiast Mike Caldwell poses in his office in Sandy, Utah, September 17, 2013. Reuters
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Nobel Laureate economist Robert Shiller, U.S. Treasury secretary Jack Lew, and JPMorgan Chase & Co. (NYSE:JPM) chairman and chief executive Jamie Dimon, all spoke out against bitcoin at the World Economic Forum in Davos.

Speaking on a panel on the topic of digital trends in financial markets, Shiller, an expert in financial bubbles, said that as a currency, bitcoin is a return to the dark ages, and a classic bubble.

“It is a bubble,” Shiller said, according to the Business Insider. “There is no question about it. It’s just an amazing example of a bubble.”

Shiller added that the computer science behind the virtual currency is an “inspiration,” it is not an economic advance.

“It’s not such a great idea,” he said he tells his students, but he’s blown away by how much fascination the virtual currency has engendered.

Lew and Dimon spoke on the regulations and possible abuses surrounding the virtual currency, which can be handled anonymously.

“From the government’s point of view, we have to make sure it does not become an avenue to funding illegal activities or to funding activities that have malign purposes like terrorist activities,” Lew told CNBC at Davos. “It is an anonymous form of transaction and it offers places for people to hide.”

Dimon said that bitcoin would be subjected to the same regulatory standards as other payment systems, and “that will probably be the end of them.” JPMorgan has been cautious in offering services to entrepreneurs in virtual currency, while rival bank Wells Fargo has launched a group to examine how it might offer bitcoin-related services, the Financial Times reported on Friday.

The virtual currency has proven very volatile in the last year, having experienced several peaks in value in late 2013, at times reaching over $1,000 before falling again due to a ban from Chinese banks.

Dimon also echoed Shiller’s sentiment, and said that bitcoin is “a terrible store of value” that “can be replicated over and over,” as well as “used for illicit purposes.”

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