Boston University hosted a wide‑ranging debate over the merits and risks of cryptocurrencies that brought two of the university’s leading macroeconomists into sustained disagreement about whether crypto is a financial menace or a transformational tool for the world’s poor.

The event, organized and summarized by BU economist Laurence (Larry) Kotlikoff, featured Professors Tarek Hassan and David Lagakos as principal debaters and was moderated by BU colleague Martin Fiszbein; Kotlikoff characterized the exchange as “great,” both for the quality of the participants and for the importance of the issue under discussion[1].

Two contrasting perspectives

Professor Tarek Hassan, whose research centers on international finance and macro‑finance, argued from a skeptical vantage point: cryptocurrencies are risky, speculative, and — in Kotlikoff’s words — effectively “dominated assets” for most investors, meaning they lack the fundamental attributes that would make them reliable stores of value or useful mediums of exchange in mainstream portfolios[1].

Professor David Lagakos, an expert in macroeconomics and development economics, pushed back by highlighting practical benefits crypto can offer in certain contexts, especially in low‑income and high‑inflation countries where traditional financial infrastructure is weak; Lagakos emphasized that for residents of places like Venezuela, where inflation has skyrocketed, crypto can provide cheaper, sometimes lifesaving access to remittances and transactions compared with collapsing local currencies[1].

Key points from the discussion

• Investor risk vs. social benefit: Hassan’s stance underscores crypto’s volatility and speculative nature for ordinary investors, while Lagakos stressed crypto’s potential to reduce transaction costs and preserve purchasing power in countries with failing fiat currencies[1].
• Context matters: Both debaters converged on the idea that the value of crypto cannot be assessed in a single, global way — benefits differ dramatically between well‑regulated, low‑inflation economies and fragile, high‑inflation environments where alternatives are scarce[1].
• Academic rigor and public policy: The debate framed crypto not only as a financial product but as a public policy challenge: whether governments should regulate, embrace, or restrict crypto depends on balancing financial stability, consumer protection, and economic inclusion[1].

Moderator’s role and broader context

Martin Fiszbein guided the panel through technical and practical questions, allowing both macroeconomic theory and real‑world evidence to shape the exchange[1]. Kotlikoff’s write‑up of the debate situates it within a broader skepticism he has previously expressed toward virtual currencies as investments, even while acknowledging contexts where crypto can serve a useful role[1][2].

Why the debate matters

The BU debate highlights why cryptocurrency remains a polarizing subject among economists and policymakers: it raises fundamental questions about what gives money value, how to protect savers and consumers, and how to expand access to low‑cost financial services in underserved regions[1].

Proponents argue crypto supports financial inclusion and low‑cost cross‑border payments, potentially benefiting migrants and families dependent on remittances in countries with unstable currencies[1]. Critics warn that speculative bubbles, fraud, and the lack of intrinsic backing for many tokens expose investors and savers to catastrophic losses and complicate macroeconomic management in fragile economies[1][2].

Notable takeaways from Kotlikoff’s account

• Kotlikoff endorses a cautious approach for most investors, characterizing virtual monies as unattractive compared with traditional assets and likening them to dominated assets for routine investment purposes[1].
• He also acknowledges that crypto can be a pragmatic solution in exceptional circumstances — for example, to circumvent hyperinflation or to enable low‑cost remittances where local payment rails are dysfunctional[1].
• The debate’s intellectual strength derives from both debaters’ deep macroeconomic knowledge: Hassan and Lagakos bring rigorous empirical and theoretical tools to bear rather than ideological extremes, making the exchange a useful model for how universities can inform public discussion on fast‑moving financial technologies[1].

Implications for policy and practice

The debate suggests several policy directions widely discussed in academic and regulatory circles: strengthen consumer protections and disclosure for crypto products, evaluate targeted regulation to limit systemic risk, and consider how to harness distributed‑ledger technologies to expand low‑cost financial services without exposing vulnerable populations to undue speculation[1][2].

Academics and policymakers watching this exchange can take away a pragmatic lesson: crypto’s societal value is conditional. It may be harmful as an investment class for many but helpful as a narrowly scoped tool for people excluded from stable financial systems[1].

Event resources

Kotlikoff’s full write‑up of the debate, which includes links to the profiles of the debaters and references to related podcast material, provides additional background and recommendations for further viewing and reading[1][3][5].