Harvard economics professor says crypto anonymity will eventually be limited %


As interest rates rise and the market value of cryptocurrency declines, many speculators in the industry are wondering if this is the beginning of the end of the crypto bubble.

Kenneth Rogoff, former chief economist of the International Monetary Fund and current professor of economics at Harvard University, said in a opinion post in Project union published on June 6 that the most intriguing topic is what will happen when governments finally take the regulation of Bitcoin and other cryptocurrencies seriously.

Rogoff argued that as long as cryptocurrency concerns impact the rest of the world, policymakers in advanced economies don’t care and regulators are more concerned with protecting domestic investors and financial stability.

However, he opined that economic theory has long proven that the value of all money ultimately depends on its possible underlying uses and that governments in advanced economies will most likely find that crypto-related problems -currencies will eventually “come home”.

“Governments in advanced economies will be forced to institute a blanket ban on digital currencies that do not allow user identities to be easily traced.”

The esteemed professor added:

“The ban should certainly extend to financial institutions and businesses, and would likely also include some restrictions for individuals.”

Impact of low interest rates on the crypto market

According to Rogoff, limiting anonymity would reduce liquidity and current cryptocurrency prices would drop significantly if caught. He felt that one of the “biggest attractions” of crypto assets is the ability they provide to circumvent governments.

He argued that implementation in all countries would not necessarily have significant influence at the local level. However, there is no doubt that the limitations will be more effective if more nations adopt them.

According to the professor, it is relatively simple to close crypto exchanges, which is the method that the vast majority of people use to trade digital currencies. He used China as an example to prove that it can be done, so it’s possible some kind of ban will be enforced.

He stressed that he is “not suggesting that all blockchain applications should be limited. For example, regulated stablecoins, backed by a central bank balance sheet, can still thrive, but there must be a simple legal mechanism to trace a user’s identity if necessary.

Finally, in the absence of a crisis, the Harvard economics professor believes that tighter regulation of cryptocurrencies could take several decades, especially given that major crypto players are investing huge sums of money in lobbying.


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