Economist Nouriel Roubini — otherwise known as Dr. Doom — argued in a new column that the underpinning technology of cryptocurrencies, blockchain, is the “most over-hyped technology.” The chairman of Roubini Macro Associates also highlighted why distributed ledger technology is not that revolutionary and could never replace the existing financial ecosystem.
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The thesis of Dr. Doom’s latest column was certainly potent, as he wrote: “In reality, blockchain is one of the most over-hyped technologies ever.”
Yet Global Leaders and Financial Institutions Back Blockchain Tech
Roubini declared he wasn’t convinced that blockchain smart contracts are faster and more efficient than existing legal contracts, a curious statement.
In contrast, major financial institution globally have already woken up to blockchain’s potential. J.P.Morgan completely disagrees, for one, and they’re no chumps. In an analysis on J.P.Morgan’s website called “Unlocking Economic Advantage with Blockchain,” the firm notably argues that blockchain will “reshape financial markets” and replace “existing asset, transaction and payments infrastructure” by 2030.
Moreover, recently Russian President Vladimir Putin and Indian Prime Minister Narendra Modi have both mentioned the importance of blockchain technology when it comes to scaling the financial ecosystem going forward.
These are just two heads of state, too. Governments around the world are beginning to sing similar tunes.
Roubini Unaware of SWIFT’s Blockchain Pilot Program
Roubini’s also argued that Ripple’s consensus mechanism is not competent to replace the Society for Worldwide Interbank Financial Telecommunication (SWIFT) payment system that currently is used by banks around the world.
The economist Roubini is apparently unaware that SWIFT itself signed a Memorandum of Understanding (MoU) with the association of Central Securities Depositories (CSDs) to explore blockchain technology to enhance post-trade processes that include trade processing.
Cross-border payments may be faster and cheaper than ever if SWIFT can make it work in the coming months.
Dr. Doom Gives an Inch
One semi-positive statement on blockchain technology from the economist’s column read:
“Ultimately, blockchain’s uses will be limited to specific, well-defined, and complex applications that require transparency and tamper-resistance more than they require speed — for example, communication with self-driving cars or drones.”
Roubini seems set to do some further backpedaling in time. And we’ll tell him, “told you so.”
Is Nouriel Roubini oblivious to the potential applications of blockchain technology? Let us know your views in the comments section below.
Images via J.P.Morgan, Business Insider