Economist Nouriel Roubini, also known as “Dr. Doom,” has admitted that bitcoin may be a store of value. Roubini sees a “big revolution” coming in the next three years due to central banks launching their own digital currencies.
After years of publicly mocking and ridiculing bitcoin, Nouriel Roubini has admitted that bitcoin may be a partial store of value.
Roubini teaches at New York University’s Stern School of Business and has his own economic consulting firm called Roubini Macro Associates. Famed for predicting the housing bubble crash of 2007-2008, his gloomy predictions have earned him the nickname “Dr. Doom” in the media.
Dr. Doom has been a long-standing critic of bitcoin. In a Senate hearing in October 2018, he called cryptocurrencies “the mother of all scams and bubbles.” He also said that the cryptocurrency world is a “stinking cesspool” and is fundamentally worth nothing.
However, Roubini may have changed his view about bitcoin, at least to a certain extent. During an interview with Yahoo Finance on Friday, he was asked what he thought of bitcoin now that it just had a bull run. After reiterating his stance that it is not a currency, Roubini said:
It may be a partial store of value because, unlike thousands of other what I call shitcoins, it cannot be so easily debased because there is at least an algorithm that decides how much the supply of bitcoin raises over time.
As for other cryptocurrencies, Dr. Doom said: “most of those other ones literally is done ad hoc, and they’re being debased faster than what the Fed is doing.”
Roubini also explained why he thinks that “cryptocurrency is a misnomer.” For something to be considered a currency, he described that it needs to be a unit of account, a single numeraire, a scalable means of payment, and a stable store of value that is not very volatile.
He claimed that bitcoin is not a unit of account because “Nothing is priced in bitcoin or any other cryptocurrency.” In addition, he said that it is not a numerator because there are many tokens, and it is not a scalable means of payment because you can only make five transactions per second, unlike with the Visa network where you can make 25,000 transactions per second.
As for the future of cryptocurrency as an asset class, he emphasized that in his view, “it’s not scalable, it’s not secure, it’s not decentralized, [and] it’s not a currency.”
Furthermore, he explained that many central banks are working on central bank digital currencies (CBDCs). When they are launched, every individual can have an account with a central bank where they can do payments from. When that happens, he said: “Not only you don’t need crypto, you don’t even need Venmo. You don’t even need a bank account. You don’t even need a check.” Dr. Doom elaborated:
The big revolution we’re going to see in the next three years is going to be central bank digital currencies. They’re going to be crowding out digital payment systems.
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