Economist Nouriel ROUBINI predicted the 2008 financial crisis. In a congressional hearing on Capitol Hill on Thursday, he is making sure U.S. senators don’t miss his warning on cryptocurrency. The United States Senate Committee on Banking, Housing, and Urban Affairs held an informational hearing titled “Exploring the Cryptocurrency and Blockchain Ecosystem.” Nouriel ROUBINI, Professor of Economics and International Business, New York University Stern School of Business; and Peter VAN VALKENBURGH, Director of Research, Coin Center were on the list of speakers.
“Crypto is the mother or father of all scams and bubbles,” Roubini, also a professor at New York University, told the U.S. Senate Committee on Banking, Housing and Community Affairs at a hearing. ROUBINI definitely earned his nickname “Dr. Doom” as he is called in the crypto community.
In a prepared testimony, ROUBINI called out “scammers, swindlers, criminals, charlatans, insider whales and carnival barkers (all conflicted insiders)” who he said tapped into retail investors’ FOMO and then took them for a ride with pump-and-dump schemes. Since the collapse of the ICO hype Bitcoin has fallen more than 67 percent, in what Roubini calls “crypto-apocalypse.” ROUBINI called the blockchain technology “the most over-hyped — and least useful — technology in human history“.
While ROUBINI’s criticism contains much truth and it is undeniable that cryptocurrencies and ICOs have been used en masse for scams and fraudulent schemes, the all-out condemnation of crypto seems so exaggerated that it does not represent a viable position for constructive discussion. There is no doubt that we need new financial systems and appropriate technologies, and there is no doubt that blockchains and cryptography are potential candidates for the implementation of such future-oriented financial systems. ROUBINI is right to condemn the many scams but he may be wrong in condemning the underlying blockchain technology.
Peter VAN VALKENBURGH, director of research at Washington-based lobbying group Coin Center, consequently took a starkly different stance and stood up against ROUBINI. While he acknowledged that it’s not widely accepted as a payment method, VAN VALKENBURGH said that aspects of it are still promising.
“Is it perfect? No. Neither was email when it was invented in 1972,” Van Valkenburgh said. “The mere fact that it works without trusted intermediaries is amazing — it’s a computer science breakthrough. It will be as significant for freedom, prosperity and human flourishing as the birth of the internet.”