Joseph Stiglitz is an American economist, professor at Columbia University, winner of the Nobel Prize in Economics. He joined forces with fellow economists Nouriel Roubini and Kenneth Rogoff in an attack on Bitcoin.
The trio claim that the digital currency will eventually be "regulated into oblivion" due to authorities' crackdown on money laundering. "You can't have a payment method based on secrecy when you're trying to create a transparent banking system," Stiglitz tells Financial News.
Indeed, "if you open up a black hole like Bitcoin, then all the criminal activity will come through that hole, and no government in the world would allow that." Serious enforcement hasn't happened yet because the cryptocurrency market is still relatively small, but "once it becomes significant, they'll use the hammer."
Bitcoin is not the only currency in trouble, however: “the euro appears to be heading towards a new crisis,” Stiglitz noted on the Project Syndicate website last month.
From 2008 to 2016, real (after inflation) GDP in the eurozone grew by only 3%. It rose by about 2.4% in 2017, but is now "weakening again." The euro "was supposed to bring shared prosperity... but it did exactly the opposite." The problem is that the euro system was "virtually designed to fail." It "took away the government's main regulatory mechanisms (interest rates and exchange rates)" while limiting public spending.
Stiglitz believes that a global deposit insurance scheme will "prevent actions against global banking systems in weak countries." But while Angela Merkel acknowledges the importance of banking unification, it appears to be "a reform that must be undertaken sometime in the future, no matter how much damage it has already caused."
According to MoneyWeek
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