Facebook has announced its cryptocurrency Libra on Tuesday and with it, the Mark Zuckerberg-founded company started doing rounds for all the wrong reasons. Drawing ire from economists, journalists and political activists alike, cryptocurrencies have found a new critic in Joseph Stiglitz, a Nobel Prize winning economist, who did not mince words in advocating against cryptocurrencies, the latest of which is Facebook’s Libra. “I actually think we should shut down the cryptocurrencies… it disturbs me a great deal that attention is given to cryptocurrencies because those were moving things off of a transparent platform into a dark platform,” the American economist told CNBC in an interview.
Explaining the perils of cryptocurrencies further, Joseph Stiglitz said that the world is already aware of the role that real estate played in money laundering. “We know from the Paradise papers and Panama papers the extent of money laundering. The large percentage of global wealth that is in these dark havens,” he added.
Joseph Stiglitz has been an active supporter of moving to an electronic payments mechanism.
“There are a lot of efficiencies; I think we can actually have a better-regulated economy if we had all the data in due time of what people are spending, it would enable the federal reserve to actually set interest rates in a much more efficient way; a better macroeconomic management,” he told the news channel. But in the case of cryptocurrencies, he strongly advocated against it and said that a way needs to be figured out for transparency of electronic payment mechanism without the dangers of surveillance and surveillance state.
Also, cryptocurrency does not hold up to the expectations of an efficient currency. “The US dollar has all the attributes of a good currency and the cryptocurrency do not have those attributes,” Joseph Stiglitz told the news channel stating that the country already has a stable currency in the form of the US dollar. “There is no need for anybody to go to a cryptocurrency,” he added.
Slated for an early launch in 2020, Libra aims at creating a low-cost global payment system available through smart devices. The currency is backed by over 25 partners which include names such as Visa, Mastercard, Uber and Spotify.