Joseph Stiglitz – “Only a fool will trust Facebook and Libra”

Nobel laureate in economics Joseph Stiglitz (Joseph Stiglitz), known for his negative attitude towards cryptocurrencies, said that “only a fool will trust Facebook and Libra.”

Stiglitz noted that cryptocurrencies are usually criticized because of their instability, while major fiat currencies have for a long time “remained very stable.” At the same time, traditional technologies allow fast transactions.

Stiglitz believes that the banking sector has made financial flows much more transparent, and also has taken measures to counter money laundering through the banking system. He noted that the steablocoin Libra will become a means for circumventing the regulation and requirements for countering money laundering.

“The last thing we need now is a new project that encourages illegal activity and money laundering. And this cryptocurrency will definitely become such a tool, ”the economist said.

At the same time, the Nobel laureate recognizes the problems of traditional banks, the main of which he considers incompetence, especially in America. According to Stiglitz, US regulators should intervene and solve this problem.

Stiglitz noted that since Libra will not pay interest on user deposits, it will be able to use this money for its profit. In addition, the question arises about the taxation of funds when they are withdrawn from cryptocurrency back to fiat money.

“In just a few years, Facebook lost all confidence, even banks could not achieve this. And again, when choosing between fulfilling promises and money, Facebook chose money. Creating your own currency – is this not a capitalist approach? ”Stiglitz concluded.

Recall that the White Book of the Libra project was presented in the middle of last month and caused a strong reaction from both regulators and representatives of the cryptocurrency community.