Central bank digital currency, not cryptocurrency, can be the future

Digital currencies issued by central banks will make transactions more efficient while cryptocurrencies serve as a vehicle for illicit activity, economist Barry Eichengreen told CNBC Monday.

Asked whether he thought cryptocurrencies like bitcoin in addition to ether would certainly play a major role inside economy, he said: “Not actually.”

“I think there can be a role for central bank-issued digital currencies which are a very different thing than crypto, anonymous currencies,” he said.

“The first alternative central bank digital currencies will make transactions more efficient. The second one can be a vehicle for money laundering, tax evasion in addition to the like.”

Cryptocurrencies have come under fire through many economists, regulators in addition to banking executives in recent weeks.

Harvard economist Kenneth Rogoff made a prediction that will the cost of bitcoin would certainly “collapse” under continued pressure through governments.

Last month, China’s regulators moved to ban initial coin offerings (ICOs) that will allow start-ups to raise funds by flogging off brand-new cryptocurrencies. The cost of the virtual asset dipped significantly following the ban.

JPMorgan CEO Jamie Dimon has called bitcoin a “fraud” that will will eventually “blow up.” Earlier This specific month, the investment banker said he would certainly refrain through commenting on bitcoin, only to scrutinize This specific again the next day.

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