The United States Senate Committee on Banking, Housing, and Urban Affairs held an informational hearing today titled “Exploring the Cryptocurrency and Blockchain Ecosystem.”
The speakers included Dr. Nouriel Roubini, Professor of Economics and International Business, New York University Stern School of Business; and Mr. Peter Van Valkenburgh, Director of Research, Coin Center. Both gave testimonies on their stances on cryptocurrencies, followed by a Q&A session with Senators.
In no uncertain terms, Dr. Nouriel Roubini’s testimony, who predicted the 2008 financial crash, the cryptocurrency ecosystem as “full of scams, insecure, and useless technology.” As CCN.com reported, Dr. Roubini has been extremely negative towards cryptocurrencies and the blockchain technology that underlies them.
He held strong to that sentiment during this hearing, though his comments did reveal a broad lack of understanding in blockchain technology. A common thread running through his responses was that the current banking and fintech systems already solved all of the problems that blockchain tries to solve, with even better outcomes.
His criticisms include:
“Only criminals and terrorists use crypto.”
“Mining is a huge harm to the environment.”
“Cryptocurrency users want a utopia where payments are decentralized without government or authorities, which is utterly ridiculous.”
“There is widespread corruption – pump and dump schemes, wash sales, etc.”
“Most tokens are non-compliant securities.”
“Utility tokens take us back to the stone age with bartering. Even the Flinstones knew better than cryptocurrencies: They used clams for barter.”
“Most corporations have found that blockchain technology is no better than a database.”
“No corporation or government would want to be on a public ledger.”
When asked if the world has benefited over the last 10 years since bitcoin’s launch, Dr. Roubini said the world has not benefited at all. Peter Van Valkenburgh, however, provided an example where a woman entrepreneur in Afganistan was able to start and maintain her business because of bitcoin. Since banks in Afganistan only allow men to open accounts, women are at a disadvantage and this woman could not pay her employees because her husband stole the company’s funds. Bitcoin allowed her to pay employees and keep her business running.
Dr. Roubini said that cryptocurrencies are a huge loophole for criminals transfer money anonymously. However, Peter Van Valkenburgh said that investigators told him that they are “delighted” to track crimes on the blockchain because of its “perfect fidelity of transactions”. This is easier than the shell accounts and international banking systems to find money laundering activies. He also mentions BTC-E as an example for how authorities were able to track criminals more easily.
Overall, Valkenburgh provided valuable education to senators about blockchain, a skill that he has made him popular.” His accommodative answers stood in contrast to the attacks from “Dr. Doom”, Dr. Roubini’s nickname in the cryptocurrency community.
Featured image from Shutterstock.
Last modified: May 20, 2020 5:09 PM UTC