No legal functions for bitcoin, says Nobel-prize winning economist

Joseph Stiglitz, Nobel-prize winning economist said bitcoin serves no useful function, other than circumventing legality.

Stiglitz, who has called on bitcoin to be outlawed, told Bloomberg Television from Davos: “We have a good medium of exchange called the dollar.”

He argues that regulating bitcoin would mean driving it out of existance, and he thinks that would be a good thing.

It’s not a secret that Joseph Stiglitz, the Nobel-winning economist and Columbia professor, is not a special fan of bitcoin.

He has called for the so-called “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, Stiglitz explained his rationale in simple terms. Essentially, he says, bitcoin is attempting to solve a problem that never existed in the first place.

“We have a good medium of exchange called the dollar,” he told Bloomberg Surveillance’s Tom Keene 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. The decline has been driven in part by fear of increased regulation in major Asian economies like South Korea and China.