Nobel laureate and economist Joseph Stiglitz said that the only function of a social network cryptocurrency is laundering of criminal proceeds.
The launch of the blockchain project Libra from Facebook has been repeatedly criticized, although a little more than two weeks have passed since the announcement. Now, the Nobel laureate and economist Joseph Stiglitz has given his negative assessment of the cryptocurrency of the social network. In his opinion, you cannot trust them.
In the past, the main complaint about national currencies was their instability, but recently this problem has been solved, and now deflation, not inflation, is dangerous, Stiglitz wrote in an article for Project Syndicate. The expert believes that technology allows for instant transactions, and the banking sector has become much more transparent, so the only function of Libra is participation in the laundering of criminal proceeds.
The economist called the “deposits” the main source of income for the social network from the blockchain project if Facebook does not pay interest to the holders of altcoin. The Nobel laureate noted that Libra can have only two economic models – aiding illegal activities and collecting user data.
But, in just a few short years, Facebook has earned a level of distrust that took the banking sector much longer to achieve. Time and again, Facebook’s leaders, faced with a choice between money and honoring their promises, have grabbed the money. And nothing could be more about money than creating a new currency. Only a fool would trust Facebook with his or her financial wellbeing. But maybe that’s the point: with so much personal data on some 2.4 billion monthly active users, who knows better than Facebook just how many suckers are born every minute?
Earlier, Standard & Poor’s rating agency stated that Libra will not become an alternative to traditional money. According to analysts, Facebook will not be able to get permission from regulators in all jurisdictions, which will seriously hinder the development of the project.