Bank of Canada Senior Deputy Governor: Bitcoin Won’t Replace Cash

Journalist:
October 18, 2017

The Bank of Canada’s senior deputy governor has said that digital currencies like bitcoin are changing finance. However, she doesn’t believe it will replace cash.

Speaking at an Institute of International Finance meeting in Washington, Carolyn Wilkins, senior deputy governor at the Bank of Canada, said:

Money that’s worth the name to be called money really does have to be a medium of exchange, a store of value – and the digital currencies that are out there right now don’t fulfill them – bitcoin doesn’t, none of them do.

Authorities around the world are researching digital currencies with some, such as Russia and China, calling for their own national cryptocurrency. Yet, while the sector is taking off in many parts of the world, Wilkins states that the issue of security would need to be tackled. She adds that unless there is a way for bitcoin to function without relying on an electric grid, it’s unlikely to gain dominance.

The Bank of Canada has, however, been considering its own digital token. Yet, Wilkins claims this is in the ‘early research phase.’

These comments come at a time when bitcoin’s value has climbed to nearly $6,000, pushing its market cap up to over $95 billion, and making it bigger than Goldman Sachs. Yet, despite the fact that the cryptocurrency market is gaining dominance, Wilkins’ voice joins that of other critics who aren’t in favour.

Last week, Jamie Dimon, JPMorgan Chase CEO, broke his silence on bitcoin by claiming that people are ‘stupid‘ for trading in it.

He said:

I couldn’t care less what bitcoin trades for, how it trades, why it trades, who trades it. If you’re stupid enough to buy it, you’ll pay the price for it one day. It can trade at $100,000, but it will eventually crash to zero. Governments are going to crush it.

Some central bankers, however, have come out in support of the digital currency. More recently, the deputy director of the Philippine central bank, Bangko Sentral ng Pilipinas (BSP), said that while bitcoin has risks, it’s like any other monetary instrument.

If you want something that is fast, near real-time and convenient then there’s the benefit of using virtual currencies like bitcoin.

Featured image from YouTube/Competition Bureau Canada.