Former Federal Reserve Chairman Ben Bernanke and ex-Bank of England Governor Mervyn King both spoke at the CME Group conference held in Florida this past Monday through Wednesday where they were asked by an audience member what they thought about Bitcoin.
King said that one of the lessons learned from that financial crisis is that one should not invest in things that one does not understand. He proved this point by stating:
"The algorithm used to help determine the value of bitcoin may prove problematic."
Claiming bitcoin is used to fund illegal activities, Bernanke said:
"The potential for bitcoin to be used to fund illegal activities means it would probably result in regulators shutting it down if its use became widespread."
The comments, made at the private event, are claimed to have been shared by commodities industry executives with TheStreet, the financial news website founded by Jim Cramer.
This is not the first time Bernanke has commented on Bitcoin, having previously shared his thoughts about it with the US Department of Homeland Security in November, 2013. Bernanke wrote:
"Although the Federal Reserve generally monitors developments in virtual currencies and other payments system innovations, it does not necessarily have authority to directly supervise or regulate these innovations or the entities that provide them to the market."
Bernanke's comments this week are in stark contrast to ones made last year:
"..While these types of innovations may pose risks related to law enforcement and supervisory matters, there are also areas in which they may hold long-term promise, particularly if the innovations promote a faster, more secure and more efficient payment system."