Former Fed Member Calls on US to Ban All Cryptocurrencies

Lee Reiners, a former member of the Federal Reserve Bank of New York, is not happy with cryptocurrencies. He believes all of them should be banned by regulators. Furthermore, he points out that the proposal to “legalize” cryptocurrencies in the US will only harm the country’s economy.

Reiners, who now works as a professor at Duke Law School, believes the current cryptocurrency crash is “justified”. That’s because, according to him, BTC, the world’s largest cryptocurrency, failed to function as digital gold.

The professor claims that the investors’ thesis that BTC is a hedge against inflation is flawed. Instead, he says that digital assets are purely speculative instruments.

In this way, the value of cryptocurrencies would only have reached more than $3 trillion due to the loose policy of the Central Bank. He argues that the excess of money printed by the BC has encouraged speculation in cryptocurrencies.

So now that the Fed has started raising rates at a rapid pace to tame inflation, crypto has fallen.

“Cryptocurrencies are worthless because they lack cash flow and fundamentals,” said the former Fed regulator.

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In addition to criticizing cryptocurrencies in general, Reiners also threw cold water on the blockchain. He said the technology doesn’t have a single “killer use case.” This is even though BTC has been around since 2009, that is, for over 10 years.

The professor also objected to members of the cryptocurrency industry constantly demanding regulatory clarity. He says this is actually a euphemism for “favorable” regulation.

Lastly, Reiners also criticized the Lummis-Gillibrand cryptocurrency bill. The project aims to make the CFTC the main regulator of the cryptocurrency market in the US and bypasses the SEC.

The Duke professor says the CFTC has a very light-hearted approach to cryptocurrency regulation.

“Giving the crypto industry everything it wants and taking protection away from investors,” he concludes.