Dr Doom Shares Blockchain Gloom, Says Central Bank Digital Currencies Won’t Run as Base Layer
Nouriel Roubini, an American economist and infamous cryptocurrency critic has debated that blockchain technology will not be the basis on which central bank digital currencies (CBDCs) will be adopted.
Nouriel, also known as ‘Dr. Doom’’(because of his prediction on the housing bubble crash in 2008) stated this at a joint panel with Vitalik Buterin, the Co-founder of Ethereum on the 4th of April 2019, during the ‘Deconomy conference’ in Seoul, South Korea.
CBDCS And Cryptocurrency
Central bank digital currencies (CBDCs) differ from cryptocurrencies, in that they are dispensed by a central bank whose legal tender standing is subject to regulations and laws of the government.
During the Joint panel named ‘Fundamental value of cryptocurrency and its sustainability’ Nouriel Roubini tried to reduce interest in the research of central banks’ on the use of CBDCs, stating that blockchain technology will not be used. He stated:
“As soon as there is news about (CBDC issuance) the people in crypto get excited and say, see it’s becoming mainstream but if you look carefully about what they want to do, if and when they’re going to do it, it’s not going to be blockchain, it’s not going to be crypto it’s going to be on a single ledger, secured.”
He also, on analyzing the likely influence of CBDCs issuance, stated that in the present financial industry, only banks can access the balance sheets of the central bank, therefore both individuals and corporations must go through banks to the central bank.
Incorporating CBDCS In The Financial System
Nouriel added that Incorporating CBDCs to the present financial system will bring about time efficient gains and a transaction cost efficiency, and if CBDCs is incorporated it:
“will displace everything else, not only cryptocurrency but also bank deposits and digital payment systems such as PayPal”
In this statement he also referenced many of his criticisms on the innovation of crypto, Like that international governments will crush the value of any anonymous digital asset exchange, and the ‘Myth’ which is Decentralized crypto.
CBDCS Research And Porpuse
Recent reports of the World Economic Forum, have stated that nothing less forty (40) of the world's central banks are doing research on CBDCs with blockchain technology with the purpose to improve :
- Cyber Security
- Payment efficiency
- Financial inclusion