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Fluff and nonsense? Roubini unimpressed with Crypto Nation Switzerland

Nouriel Roubini

WEF stalwart Roubini, pictured here at a previous edition, is a long-term fierce critic of cryptocurrencies.

(Keystone / Jean-christophe Bott)

Switzerland’s flourishing cryptocurrency and blockchain sector continued its expansion last year. But this did not stop renowned US economist Nouriel Roubini berating a gathering of blockchain enthusiasts at a World Economic Forum side event, telling them: “It’s all fluff, just total fluff.”

Roubini made his comments at the CV Summit in Davos on Thursday, following the presentation of a study that showed the number of Swiss blockchain companies and jobs increasing for a third year.

The self-styled “Crypto Nation” recorded 842 ventures in Switzerland and Liechtenstein by the end of 2019. This included the Libra stablecoin project that arrived with much fanfare last summer before running into a wall of potentially fatal protest from governments and regulators.

This compares to 750 entities in 2018, a figure that includes start-ups, assorted services such as legal and consultancy firms plus academic institutions. The number of jobs supported by the industry grew from 3,300 to 4,400, states a surveyexternal link from business incubator CV VC and PwC Strategy&.

The growth rate has slowed down from the heady period of 2017, running into the first half of 2018. The number of start-up casualties is also starting to mount.

In January, the crypto company Alethena ran out of steamexternal link having failed to persuade investors to part with their cash. This follows the demise last year of luxury goods tokenisation outfit Tend, blockchain real estate start-up SwissRealCoin, alternative banking project Oyoba and the failure of Monetas to find a white knight savior.

However, many other projects have firmly established themselves in Switzerland, prompting CV VC CEO Mathias Ruch to proclaim that the sector “has become more stable and mature.” This was further evidenced by the Swiss financial regulator awarding the first two banking licenses to new banks specialising in digital assets.

Ruch also highlighted increasing interest in Swiss blockchain know-how from large Chinese banks, government agencies and investors in recent months.

But Roubini, also speaking at the CV Summit, was unimpressed by talk of transforming finance through blockchain. Referring to fintechs such as Alipay, M-PESA, Venmo, PayPal and Square, Roubini said: “There is a revolution in payment services in the financial system, billions of people doing billions of transactions every day. This has zero to do with crypto and blockchain. That’s the reality.” 

swissinfo.ch

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