Crypto Regulation: Governments, Central Banks 'Way Behind The Curve', Harvard Economics Professor Says

Kenneth Rogoff said that officials only “throw out” the idea of having a CBDC to “distract the conversation.”

India is looking to launch a CBDC this year.

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Kenneth Rogoff, a Thomas D. Cabot Professor of Public Policy and professor of economics at Harvard University as well as a chess Grandmaster and former International Monetary Fund (IMF) chief economist, said that central banks and governments are “way behind the curve” when it comes to regulating cryptocurrencies. During a podcast interview with Bloomberg, Rogoff said that officials only “throw out” the idea of having a Central Bank Digital Currency (CBDC) to “distract the conversation.” Rogoff has been a staunch crypto skeptic for years.

During an episode of Bloomberg Surveillance on July 18, Rogoff was discussing the impact of a stronger US dollar on the global economy when he said, “I think central banks are way behind the curve, and governments in general, in regulating cryptocurrencies. They throw out the idea of having CBDCs to distract the conversation.”

“At the moment, if you think about the United States issuing a CBDC, you have to ask why they’re doing it,” said Rogoff during the podcast, as reported by Bitcoin.com. “Because we can accomplish a lot of things the same way in the current system by making tweaks.”

Rogoff believes that there are small central banks who wish to issue a CBDC in hopes of facilitating “some of the kind of business that crypto gets.” He added that there would be a “massive disintermediation that we are probably not ready to handle,” if the US Federal Reserve “did it too well” and if there is a “retail central bank digital currency.”

“I think it feels like the 1990s and early 2000s to me when the financial system was inventing all these clever new financial engineering devices and saying … ‘catch me if you can,’ ‘regulate me if you can,'” Rogoff said when commenting on why governments and central banks are delaying the regulation of crypto. 

“I hear very much the same things from the young cryptocurrency pioneers and there are a lot of ideas. But they are wrong that they can’t be regulated,” Rogoff added.

As mentioned, Rogoff always maintained a strong stance against cryptocurrencies, having previously warned that central banks won’t allow Bitcoin and other crypto coins to become mainstream. 

In the meantime, it appears that India is looking to launch a CBDC this year. In June, Reserve Bank of India (RBI) Deputy Governor T Rabi Sankar said that a CBDC will indeed be launched this year, however, the “process of introduction will be gradual” to ensure smooth implementation.

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