Harvard professor of economics and former chief economist of the International Monetary Fund (IMF) Kenneth Rogoff believes governments will not allow Bitcoin to flourish on a large scale. “The regulation will go into effect. The government will win,” he said. The professor also discussed the likelihood of a bitcoin bubble.
Harvard professor warns of strict crypto regulation
Harvard University professor Kenneth Rogoff shared some thoughts on Bitcoin regulation in an interview on Bloomberg Surveillance last week. Rogoff is the Thomas D. Cabot Professor of Public Policy and Professor of Economics at Harvard University. From 2001 to 2003 he was also chief economist at the International Monetary Fund (IMF).
“It’s speculative,” he began. “I was a bitcoin skeptic and certainly the price has gone up.” However, Rogoff argued, “There’s kind of an ultimate question what the benefit is. Is it just valuable because people think it’s valuable? That’s a bubble that would explode.”
He continued, “I can see Bitcoin being used in failed states. It is conceivable that it might have some use in a dystopian future. “Still, he emphasized,” I think governments will not allow large-scale pseudonymous transactions. They just will not allow it. “The Harvard economics professor said:
The regulation will come into force. The government will win. It doesn’t matter what technology it is.
“So, I think in the long run, if there is no benefit, the bubble will burst. I hope there isn’t such a valuable benefit, but I suppose it’s a hedge against dystopia,” he continued.
Rogoff was then asked, “Would you advise Treasury Secretary Yellen that the US should proactively introduce this regulation that could lower the price of cryptocurrency?”
He simply replied, “Yes, this is true across the board. It needs to be regulated … I think the governments are on it. It is not used that often, and I suspect, although Bitcoin lobbyists have succeeded in some places it won’t last. “
Rogoff has long been a bitcoin skeptic. In 2018, he told CNBC that the cryptocurrency would be more likely to be worth $ 100,000 than $ 100,000 in a decade. “If you take away the possibility of money laundering and tax evasion, the real uses as a transaction instrument are very small,” said the former chief economist of the IMF.
Last week, Joe Biden’s election for US Treasury Secretary Janet Yellen stated that cryptocurrencies are primarily used for illegal funding. She later softened her stance and pledged to work with the Federal Reserve Board and other regulators to implement “effective” crypto regulation. A week earlier, the President of the European Central Bank (ECB), Christine Lagarde, urged countries to regulate Bitcoin, claiming the crypto was “doing funny deals” and “totally reprehensible money laundering activities”. Despite the conviction of regulators, an industry report found that crime accounted for just 0.34% of all crypto transactions in 2020.
Meanwhile, several U.S. lawmakers have stated that governments shouldn’t try to stop Bitcoin. MP Patrick McHenry previously said:
Because of the nature of Bitcoin’s technology, governments cannot and should not kill it.
In addition, the US now has a bitcoin-friendly legislature. Senator Cynthia Lummis has vowed to make sure Congress understands that Bitcoin is a great store of value. She is a hover who believes that Bitcoin “holds great promise and can rise to the US dollar as a viable alternative store of value on both an institutional and personal level”.
What do you think of the Harvard professor’s opinion on Bitcoin? Let us know in the comments below.
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