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Nobel economist Paul Krugman slams crypto as mostly useless, after saying it's hugely overpriced and helps criminals

paul krugman
Paul Krugman.REUTERS/Brendan McDermid
  • Paul Krugman says crypto is mostly useless, overvalued, and appeals to bank skeptics and criminals.

  • The Nobel Prize-winning economist flagged a "crypto bubble" and the "dark side" of the crypto world.

  • Krugman has dismissed crypto as inefficient, volatile, and propped up by hype and speculation.

Paul Krugman has dismissed cryptocurrencies as largely useless, weeks after saying they're hugely overpriced and appeal mostly to bank skeptics and criminals.

The Nobel Prize-winning economist took aim at bitcoin and other tokens in a Twitter thread on Friday, which compared Ron DeSantis' disdain for central bank digital currencies (CBDCs) to Rick Santorum's dislike of the National Weather Service.

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"Of course, private weather services do provide a useful service," he tweeted. "Cryptocurrencies ... not so much."

Krugman delivered a far harsher critique of crypto in a New York Times op-ed in April.

"Right now the demand for cryptocurrency comes partly from people who honestly, rightly or wrongly, don't trust banks, and partly from people engaged in illicit activities," he wrote.

The article questioned why DeSantis, Florida's governor and a Republican presidential candidate, was railing against the potential creation of a CBDC.

Krugman suggested that Americans who distrust banks might embrace a digital dollar issued by the US government. It would "help to deflate the crypto bubble" and "strip away the veil obscuring the dark side of crypto" as only wrongdoers would continue to use unofficial tokens, he said.

DeSantis has claimed authorities might restrict what a CBDC is spent on and use it to infringe on Americans' freedom, but Krugman argued that rejecting a digital dollar would have a different result.

"It wouldn't protect the rights of Floridians to buy gas or guns; instead, it would protect the ability of wiseguys to evade taxes, launder money, buy and sell illegal drugs, and engage in extortion," he said.

Krugman has torn into cryptos several times over the past decade. He's slammed them as wasteful, inefficient, unstable, pointless, worthless, and at risk of complete collapse.

Read the original article on Business Insider