Joseph Stiglitz And His Idea Of Crypto

By Rishma Banerjee

Joseph Stiglitz, the former World Bank head, recently spoke about his distaste for crypto and has said that the whole phenomenon “should be shut down.” He, in a CNBC interview, said,

“It disturbed me a great deal – the attention that was given to cyptocurrencies… Because those were moving things off of a transparent platform and into a dark platform.”

Stiglitz, however, did not specify the period of “attention” that he was referring to, or whether cryptocurrency, in general, should have remained out of the public spotlight. He said this in the context of his ideas for shoring up the global economy, which, according to him, should be done by making it entirely electronic. The benefits of such an action, according to him would be two-fold: reducing inefficiencies in the existing system while eradicating financial crime.

On this point, Stiglitz insinuated that cryptocurrency was complicit in aiding such crime. He said,

“We know the role of real estate and money laundering, we know from the Paradise Papers and the Panama Papers the extent of this money laundering.”

Stiglitz continued to remain vague and was not able to figure out a link between cryptocurrency and Paradise and Panama, which themselves arguably only demonstrated the lack of transparency of the fiat money system.

However, in the economist’s mind, the US dollar is easily a better choice than Bitcoin. He added,

“We have a very good currency so far; the currency’s been run in a very stable way, there’s no need for anyone go to a cryptocurrency… I actually think we should shut down the cryptocurrencies.”

He once more revealed the familiar gap that existed in Bitcoins, as he said everything without elaborating how a decentralised entity would be “shut down” and by whom. Known for his soundbites calling for an end to Bitcoin, the Berkshire Hathaway mogul’s investments in some of the least transparent fiat institutions became a cause of ridicule on social media this week.

Specifically, as one user pointed out, Buffett’s most significant portfolio positions are in institutions which themselves have often taken a hostile stance towards crypto – Bank of America and American Express.