At a time in which bitcoin reaches a new all-time high of $17,900 and the cryptocurrency’s market cap nears the $300 billion mark, regulations are seemingly becoming a very popular way for governments to cope with its existence. Recently, speaking to CNBC, German economist Clemens Fuest stated there are “strong reasons” to regulate cryptocurrencies like bitcoin.
Fuest, the President of the Ifo Institute for Economic Research, argued that the market shouldn’t be allowed to fly on its own, as according to him there’s a case for regulators to look into bitcoin due to financial stability and monetary policy, as well as its use.
During a phone call the German economist pointed out that, with the cryptocurrency, “payments can be made with very little or no supervision” and implied that this means the cryptocurrency can be used for tax avoidance or financing of illegal activities.
Taking this into account, Fuest concluded:
“I think there are strong reasons, beyond monetary policy, to regulate this more closely.”
The economist’s words come at a time in which the stock exchange operator Deutsche Borse is reportedly considering whether to make Germany the first European country to list bitcoin futures contracts on a regulated trading platform, and in which regulators throughout the world are warning investors about the potential risks of investing in cryptocurrencies and ICOs.
As covered by CCN.com, European Central Bank council member Ewald Nowotny recently stated that central bankers and legislators are eyeing cryptocurrency regulations. Nowotny’s comments came when bitcoin was trading at a then all-time high of $8,100, and added that investors must understand the product as “it is like buying shares on the bourse [stock market]… people investing in this product can suffer losses and if that happens, they simply have to accept it.”
Fuest isn’t the only economist that expressed his views on bitcoin. Last month, Nobel prize-winning economist Joseph Stiglitz claimed bitcoin “ought to be outlawed” as, according to the economist, it “doesn’t serve any socially useful function.” Earlier this month Nobel laureate Robert Shiller predicted a bitcoin crash, adding that it “won’t go to zero, it will just come down.”
However, not everyone’s bearish on the cryptocurrency. Israel’s Prime Minister, Benjamin Netanyahu, an MIT graduate and previous economic consultant, recently questioned whether or not bitcoin can destroy banks. John McAfee, a cybersecurity pioneer with an eclectic personality, raised his bitcoin price target for 2020, making it $1 million – and even bet his manhood on it.
Featured image from Shutterstock.
Last modified: May 20, 2020 9:16 PM UTC