Despite the cryptocurrency sector growing larger by the day, not many financial experts trust it, and some are very critical of its flagship asset – Bitcoin (BTC), including Hans-Joachim Voth, Professor of Economics at the University of Zurich.
Although he did acknowledge that blockchain technology had some advantages, Voth doesn’t believe Bitcoin or any other cryptos can replace money or solve any modern monetary problems, as he told Kitco News’ David Lin in an interview published on September 13.
Taking away the driver’s license from governments and banks
In the interview, Voth discussed the modern monetary theory (MMT), which basically suggests that the government can solve a lot of problems by creating more money without fear of consequences as its the issuer of the currency.
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He expressed his disagreement with it, stating that it was attractive but implausible, also stressing that the gold standard or the Bretton Woods system was an example of an alternative that would still fail to solve these problems. As he explained:
“The main point of the gold standard is to take away the driver’s license of governments and central banks and say ‘no no no, there’s a sort of completely artificially chosen limited quantity of X, and that constrains how much money you can issue, and then everything is going to be better and I think that’s silly.”
Bitcoin is a ‘disaster environmentally and in terms of transactions’
Asked by the host whether a Bitcoin standard could fix some of the problems or do some of the things that the Bretton Woods system failed to do, Voth voiced his pessimism over such a scenario, opining that:
“I just do not see a single problem that gets solved by cryptocurrencies, certainly not Bitcoin, which is a disaster environmentally, it’s a disaster in terms of transactions. But also Ethereum and all the other cryptocurrencies, they’re solutions in search of a problem.”
However, the Zurich University professor does admit that “blockchain has all sorts of attractive attributes” but concludes again that “the idea that this should be replacing money seems completely misguided to me.”
Watch the full interview below:
Featured image via New Economic Thinking YouTube
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