Renowned economist and Nobel-prize winner Joseph Stiglitz has revealed that he believes it’s possible to ‘shutdown’ cryptocurrencies.
The announcement, made during an interview with CNBC, shows how little traditional economists understand about blockchain and the cryptocurrency industry. One of the key tenets of decentralization is the fact that it is immune to government seizure and control. To a certain extent, governments can attempt to thwart cryptocurrency through regulating businesses that use them but to shut them down completely would be practically impossible – even for the most powerful of governments.
Failed attempts to ban Bitcoin
In the ten years that Bitcoin has been in existence, many nations have attempted to ban it, with varying levels of success. China is probably one of the most famous cases but despite its infamous ban, cryptocurrency investors in the nation continued their activities largely unabated. Following a ban on banks dealing in Bitcoin transactions in 2013, Chinese Yuan to Bitcoin transaction volume continued to grow, eventually accounting for 80% of global Bitcoin volume. Now, following a crackdown on ICO’s and exchanges, the country is considering banning crypto mining – a move that would likely be good for cryptocurrency in the long run.
India is the latest nation to attempt a similar ban following reports that cryptocurrencies could facilitate money-laundering. However, such a ban is more likely to increase incidents of money-laundering related to cryptocurrency. Countries that have enacted rational regulations on cryptocurrency have seen far better results in the reduction of crime related to them.
Lack of transparency
In the CNBC interview, Stiglitz went on to suggest that the U.S. dollar is a good currency and there is no need to attempt to adopt a new digital one. Despite this, he does believe a digital payment system would be good to improve transparency in the financial system, clearly unaware that most cryptocurrencies, including Bitcoin, are actually very transparent.
Considering the negative tone of the interview and the general contra-indicative nature of CNBC reporting, the next few days should bring significant gains in the crypto market.