Nobel Prize Winning Economist, Joseph Stiglitz, recently expressed his views on cryptocurrency and the need for a transparent electronic payment system.
Stiglitz is an American Economist who won the Nobel prize in 2001 for his analysis of markets with asymmetric information, and he was a lead author of the 1995 Report of the Intergovernmental Panel on Climate Change, which shared the 2007 Nobel Peace Prize.
According to him,
“We should shut down the cryptocurrencies… I’ve been a great advocate of moving to an electronic payment system.”
Dark Havens of Money
What might seem like a contradictory statement for cryptocurrency enthusiasts; actually hints at one of the ugliest truths about the global financial system. He acknowledged the ‘dark side of the economy’ which was revealed numerous times in “Panama papers, paradise papers and work of Gabriel Zookman.”
Stiglitz is not against the idea of a transparent electronic payment system. He told the media,
“I think we can actually have a better-regulated economy if we had all the data in real time knowing what people are spending… of moving to an electronic payments mechanism there are a lot of efficiencie. It also would curb some of the illicit economic activities.”
While cryptocurrencies fit the exact definition of an electronic system, according to him, its decentralization is promoting money laundering. Moreover, while cryptocurrencies are transparent, they are actually facilitating the transfer of wealth to these “dark havens.” He said,
“…Disturbed me a great deal, the attention that was given to cryptocurrencies. Because of those who are moving things off of a ‘transparent platform’ into a dark platform.”
These dark platforms or money laundering havens are storing a “large percentage of global wealth” which is being laundered through these transparent blockchain projects.
Stablecoins are fine?
Stiglitz also voted for the primary inclusion of the US dollar in the global electronic payment system. He said,
“We have a very good currency. The US dollar has all those attributes (of being a good currency). The cryptocurrencies do not have those attributes.”
These point towards the potential of ‘stablecoins’ on the Blockchain. They will help induce transparency to the global financial system ensuring regulatory compliance and economic stability.
Do you think that the cryptocurrencies should be shut down as well? Please share your views with us.
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Nivesh from Engineering Background is a full-time Crypto Analyst at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on Twitter at @nivishoes or mail him at nivesh(at)coingape.com