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Nouriel Roubini said due to the lapses of existing digital currencies bordering on scalability and security most importantly, they cannot be the future of digital payments, but CBDCs will.
Renowned Economics Professor at the New York University’s Stern School of Business and CEO of Roubini Macro Associates Nouriel Roubini has weighed in on the growing interest in the crypto space particularly as it relates to Bitcoin (BTC), and Central Bank Digital Currencies (CBDCs). In an interview with Yahoo Finance, Roubini reiterated his reservations about digital currencies calling the asset class a ‘Misnomer’.
“I have pointed out that cryptocurrency is a misnomer, because, for something to be a currency, you have to be a unit of account,” he recanted. “Nothing is priced in Bitcoin or any other cryptocurrency. You have to be a single numerator, and with so many tokens, you don’t have a single numerator.”
He also faulted digital currencies in that they are not scalable means of payment as Bitcoin (BTC) can only process about 5 transactions per second in comparison to transactions on the Visa Network which is about 25,000 per second.
While Nouriel Roubini acknowledged that Bitcoin could serve as a “partial store of value”, as unlike the other altcoins, “it cannot be so easily debased because there is at least an algorithm that decides how much the supply of Bitcoin raises over time.” This uniqueness to Roubini makes Bitcoin more valuable than altcoins which he noted are “being debased faster than what the Fed is doing.”
Nouriel Roubini on CBDCs
The economics behemoth believes that due to the lapses of existing digital currencies bordering on scalability and security most importantly, they cannot be the future of digital payments, but CBDCs will. He stated:
“Once you have a central bank digital currency, every individual can use an account with the central bank to do payments. So 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 the check. And the big revolution we’re gonna see in the next three years is gonna be central bank digital currencies.”
Nouriel Roubini also reiterated the fact that the emergence of Central Bank Digital Currencies will crowd out the digital payments landscape, as well as existing digital currencies.
The race to launch a CBDC has become a very important part of most nation’s digital payment evolution and while the majority of nations affiliated with Switzerland based Bank of International Settlements (BIS) are showing their interests in related projects, few including China and Sweden are outpacing others.
Using China as a case study, the country’s apex bank, the People’s Bank of China (PBoC) has developed the proposed Digital Yuan which has been in testing for months and has processed 4 million transactions amounting to about 2 billion yuan. The private sector is also lending support for the nationwide adoption of the Digital Yuan when it eventually gets launched. Huawei embedded a digital yuan hardware wallet in its latest 5G enabled smartphone as reported by Coinspeaker.