Bitcoin 'Ought to Be Outlawed,' Economist Joseph Stiglitz Says

The former chief economist of the World Bank wants bitcoin banned.

"Bitcoin is successful only because of its potential for circumvention, lack of oversight," Joseph Stigliz, currently a professor at Columbia University, said in an interview on Bloomberg Television today, as the cryptocurrency reached new all-time highs this week.

Because of this, he added:

"So it seems to me it ought to be outlawed. It doesn’t serve any socially useful function."

However, Stiglitz, who also chaired the U.S. President's Council of Economic Advisers during the Clinton Administration, said he does support technological innovation in payments, but thinks digital money should still be fiat created and controlled by the government.

"Let’s move away from paper into the 21st century of a digital economy," he said.

Like many other members of the Davoisie, Stiglitz – who won the Nobel Memorial Prize in Economic Sciences in 2001 – called the run-up in bitcoin's price unjustified and unsustainable.

"It’s a bubble that’s going to give a lot of people a lot of exciting times as it rides up and then goes down," he said. "The value of a bitcoin today is expectations of what the bitcoin is going to be tomorrow."

And even though bitcoin is a decentralized network, with participants scattered around the globe, Stiglitz seemed to think Washington could easily nip it in the bud.

"If the government says 'the reason bitcoin is being used is circumvention,' they could close it down at any moment," he said. "And then it collapses."

You can watch the clip here:

Joseph Stiglitz photo via Wikimedia Commons.