Harvard professor and renowned economist Kenneth Rogoff, who’s in the past argued for a reduction in the amount of physical cash, has recently stated that bitcoin is likelier to hit $100 than $100,000 a decade from now.
Speaking at CNBC’s “Squawk Box,” the former chief economist at the International Monetary Fund (IMF) argued that if the cryptocurrency stops being used to launder money and evade taxes, its “actual uses as a transaction vehicle are very small.”
“I think bitcoin will be worth a tiny fraction of what it is now if we’re headed out 10 years from now … I would see $100 as being a lot more likely than $100,000 ten years from now.”
Bitcoin has indeed been associated with illicit activities such as money laundering and tax evasion. Expert estimates on the cryptocurrency’s use in these activities vary. As reported by CCN.com, a 2016 Europol report found no evidence of terrorists using bitcoin.
Moreover, a report from the European Commission to the European Parliament and Council found that terrorists and criminals are barely using bitcoin or ethereum. The report labeled the risk of digital currencies being used to finance terrorism as “moderately significant.”
Nevertheless, according to Rogoff, government regulations would be a trigger for bitcoin’s demise. The economist stressed that developing a global framework of regulations would take time. He noted:
“It really needs to be global regulation. Even if the U.S. cracks down on it and China cracks down, but Japan doesn’t, people will be able to still launder money through Japan.”
Throughout the world, individual countries are creating their own regulations for cryptocurrencies. Last year, Japan legalized the flagship cryptocurrency as a payment method.
Mexico’s congress has also approved cryptocurrency and crowdfunding regulations, that just need the president’s signature to become law. Similarly, the Philippines’ primary securities regulator has confirmed it will work toward crafting regulations for cryptocurrency transactions and initial coin offerings (ICOs).
According to Rogoff, authorities have been slow to regulate bitcoin and other cryptocurrencies because they anticipate developments in the technology behind cryptocurrencies. Per his words, regulators want to see the technology develop,” as the private sector has historically “invented everything” when it comes to currency.
Notably, this isn’t the first time Rogoff takes a bearish approach to bitcoin. Back in October, the former chief economist at the IMF argued bitcoin’s price will collapse in the long run, as “the long history of currency tells us that what the private sector innovates, the state eventually regulates and appropriates.”
Featured image from Flickr/Richter Frank-Jurgen.
Last modified: March 4, 2021 5:05 PM