Joseph Stiglitz who is the winner of 2001 Nobel Prize for Economics opined that cryptocurrencies need to be shut down. With stock plummeting on the backdrop of threats with US-China trade war, former world bank head has shown his distaste towards cryptocurrency.
In an interview conducted by CNBC, he has said that it has disturbed him a great deal given the attention it has got as of lately. While saying that digital payment structure is the future, he still doesn’t believe decentralized currency to be a part of this current trend. He is yet to mention the specific span of attention that he talked off and whether it deserved to stay out of the public sight. But given the context of his interview, he probably was pointing at his point where he says that the future should be entirely electronic.
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He said that these are moving things from a transparent platform to a darker one. The author of “Price of Inequality” has also stated that an electronic payment structure along with a regulated economy can assist central banks such as Federal Reserve in devising and employing their macroeconomic strategies.
He thinks that the dichotomy will be able to curb any forms of illicit activities that might get pedaled through the cryptocurrency industry. This might explain him being disturbed by the overwhelming buzz it has created, surround their diluted rendition of transparency, anonymity, and privacy.
There have been instances where several channels have harbored illicit financial activities such as scams, frauds, money laundering which has debilitated the financial system, causing global wealth loss. According to him, a more efficient economy will be able to have a remedial effect if they adopt or lean towards electronic payment structures.
Joseph Stiglitz continued to talk of the benefits which he thinks will be coming in two folds i.e. reduction of inefficiencies within the existing system while eradicating the financial crisis at the same time.
Joseph Stiglitz also stated that recent research has shown that a large amount of global wealth is being kept in the dark havens.
While stating about Paradise Papers and the Panama Papers, as an example of the severity to which money has been laundered, Stiglitz remained vague and failed to provide a solid link between cryptocurrency and Panama/Paradise. They themselves only demonstrate the sole lack of transparency in the Fiat money system.
However, Joseph Stiglitz thinks that the US dollar is feasibly a better alternative than that of Bitcoin. To explain further, he said that the US as a currency has been quite stable and ran very thoroughly. He is yet to comprehend people’s affinity towards cryptocurrency. Then he adds that cryptocurrency needs to be shut down.
He also failed to elaborate on the process which can shut a decentralized system down and by whom specifically? He has also revealed a familiar crevice in the comprehension of Bitcoin system which also has been formerly critics by personalities such as Warren Buffett.
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