The professor of economics at Harvard, Kenneth Rogoff has also worked for the International Monetary Fund (IMF) as their chief economist. He said that governments and central banks have fallen behind the curve in terms of crypto regulation. He went on to say that the idea of central bank digital currencies (CBDCs) was usually tossed out by officials to derail the conversation whenever regulation is brought up.
Harvard’s professor talks regulations
On Monday, American economist and Harvard professor Kennett Rogoff talked about central bank digital currencies (CBDCs) and crypto regulation in an interview. Not only is he a professor of economics, but also the Thomas D. Cabot Professor of Public Policy at Harvard University. From 2001 to 2003, he was also the chief economist for the IMF.
He said that when it comes to regulation, governments, and central banks have fallen behind and they just begin discussing CBDCs when the topic is brought up. He also talked about the United States issuing a CBDC and said that at this point, it does not make sense to introduce a digital dollar. According to the Harvard professor, a lot of things can be accomplished by just making a few tweaks to the existing system.
The economics professor said that the problem of introducing a CBDC is that if the US Federal Reserve accomplishes this task and does it well and a retail CBDC is introduced, then it would lead to huge disintermediation.
He warned that they were just not capable of handling that in the current climate. Professor Rogoff said that it was small central banks that want to pursue the idea of CBDC because they are interested in generating the same kind of business that cryptocurrencies are able to get.
He was also questioned as to why there was a delay in crypto regulation and why governments and central banks were falling behind. In response, he said that it was similar to what had happened in the 1990s and 2000s when new financial engineering devices had been introduced in the financial system and vying for regulation.
The professor said that a lot of young crypto entrepreneurs and pioneers are saying the same thing, but said that they were wrong to claim that regulation is not possible.
It should be noted that the former IMF chief economist is also a bitcoin skeptic. He had previously stated that governments and central banks would not be in favor of bitcoin entering the mainstream. In 2018, he had predicted that Bitcoin would be valued at $100 in a decade rather than $100,000.
The IMF’s former chief economist said that bitcoin does not have a lot of use cases other than being used as a tool for tax evasion and money laundering. His remarks about crypto regulation come at a time when this topic is heating up, as a number of countries are now taking the matter seriously and working on overseeing this rapidly growing sector.