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Nobel economist Stiglitz sees no legal functions for bitcoin: 'We have a good medium of exchange called the dollar'

Cryptocurrency NewsJan 23, 2018 09:55AM ET
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2/2 © Thomson Reuters, The economist Joseph Stiglitz speaking at the 2016 IMF World Bank Spring Meeting in Washington. 2/2
  • The Nobel Prize-winning economist Joseph Stiglitz says bitcoin serves no useful function — other than circumventing legality.
  • Stiglitz, who has called on bitcoin to be outlawed, told Bloomberg Television from Davos, Switzerland: "We have a good medium of exchange called the dollar."
  • He argues that regulating bitcoin would mean driving it out of existence — and he thinks that would be a good thing.


It's not a secret that Joseph Stiglitz, the Nobel Prize-winning economist and Columbia professor, is not a special fan of bitcoin (BitfinexUSD).

He has called for the cryptocurrency to be outlawed, arguing that it is used primarily for illicit purposes such as money laundering and tax evasion.

Pressed about it during a Bloomberg Television interview from Davos, Switzerland, where the World Economic Forum is happening this week, Stiglitz explained his rationale in simple terms. Essentially, he says, bitcoin is attempting to solve a problem that never existed.

"We have a good medium of exchange called the dollar," he told Tom Keene of "Bloomberg Surveillance" on Tuesday morning from the snow-capped Swiss peaks. "We can trade in that. Why do people want bitcoin? For secrecy."

The banking system can and is already moving toward greater use of digital payments, Stiglitz added, "but you don't need bitcoin for that."

"My feeling is that when you regulate it so that you couldn't engage in money laundering and all these other things, there would be no demand for bitcoin," he said. "So by regulating the abuses you are going to regulate it out of existence."

The price of bitcoin crashed recently after a jaw-dropping run-up that drove it to a peak of nearly $20,000 a coin. The decline has been driven in part by fear of increased regulation in major Asian economies like South Korea and China.

Nobel economist Stiglitz sees no legal functions for bitcoin: 'We have a good medium of exchange called the dollar'
 

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Fabio Vivaldini
Fabio Vivaldini Jan 23, 2018 4:31PM ET
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For sure, till the bitcoin remained at very low value, the bank and government didn't took care about it..Now that it moves a lateral economy, maybe not controlled but real, banks and government want take their great part as usually they do with normal currency and private profit..I'm quite sure they will drop a tax about 30-40% over the movement of money from bitcoins/altcoins to "normal" money, then everybody will be fine...
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Robert Ace
Robert Ace Jan 23, 2018 2:09PM ET
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For the dollar to be strong it requires the backing of the American military industrial complex. Since the inception of the dollar-backed dollar in 1971 the dollar has done nothing but lose value. What they call inflation is a tax. What they call tax is legal larceny. Criminals run the dollar-scheme.
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Oliver Rios
orios01 Jan 23, 2018 12:48PM ET
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bingo. dollar and euro as deemed by the IMF. bitcoins elasticity is tarnished because there are alternatives. if anything id argue that bitcoin needs the dollar more than the dollar needs bitcoin. that being said if you know whats gonna happen to the dollar in exchange for increased output. bitcoin is about to see a world of hurt over the next series of months unless currency inflows are more diversified
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