Harvard professor of economics and former chief economist at the International Monetary Fund (IMF) Kenneth Rogoff believes that governments will not allow bitcoin to flourish on a large scale. “The ordinance is coming in. The government will win,” he said. The professor also discussed the possibility of a bitcoin bubble.
Harvard professor warns against strict crypto regulation
Harvard University Professor Kenneth Rogoff shared some thoughts on bitcoin regulation during an interview about Bloomberg Surveillance last week. Rogoff is the Thomas D. Cabot professor of public policy and professor of economics at Harvard University. From 2001–2003 he was also chief economist at the International Monetary Fund (IMF).
“It’s speculative,” he began. “I’ve been a bitcoin skeptic and the price has definitely gone up.” Rogoff argued, however, “there is a kind of ultimate question of what the point is. Is it just valuable because people think it is valuable? That’s a bubble that would blow up. “
He continued, “I see bitcoin is being used in failed states. Conceivably it could be of some use in a dystopian future. Nonetheless, he stressed, “I don’t think the governments will allow pseudonymous transactions on a large scale. They just won’t allow it.” The Harvard economics professor elaborated like this:
The ordinance comes in. The government will win. It doesn’t matter what the technology is.
So I think in the long run if there’s no point, the bubble will burst. I hope it is not of much value, but I assume it is a cover against dystopia, ”he continued.
Rogoff was then asked, “Would you advise Treasury Secretary Yellen that the US should be proactive in setting up those regulations that could collapse the price of cryptocurrency?”
He simply replied, “Yes, that’s just true across the board. It must be regulated … I think the governments are on it. It’s not that widely used and I suspect that while the bitcoin lobbyists have managed to get it in some places, it won’t last. “
Rogoff has long been a bitcoin skeptic. In 2018, he told CNBC that in ten years’ time the cryptocurrency was likely worth $ 100,000 than $ 100K. “If you take away the possibility of money laundering and tax evasion, its actual use as a transaction tool is essentially very small,” said the former IMF chief economist.
Last week, Joe Biden’s choice for US Treasury Secretary Janet Yellen declared cryptocurrencies mainly used for illegal funding. She later softened her position somewhat and pledged to work with the Federal Reserve Board and other regulators to establish an ‘effective’ crypto regulation. A week earlier, the President of the European Central Bank (ECB), Christine Lagarde, called on countries to regulate bitcoin, claiming that the crypto has “done funny business” and a number of “totally reprehensible money laundering activities”. Despite the conviction of regulators, an industry report found that crime was only in 2020 0.34% of everything crypto transactions.
Meanwhile, several US lawmakers have said that governments should not try to stop bitcoin. Rep. Patrick McHenry previously said:
Due to the nature of Bitcoin’s technology, governments cannot kill it, and they shouldn’t.
In addition, the US now has a bitcoin-friendly legislator. Senator Cynthia Lummis has vowed to ensure that Congress understands that bitcoin is a great store of value. She is a hodler who believes that bitcoin has “shown great promise and can rise as a viable alternative store of value for the US dollar, both on 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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