Canada’s cryptocurrency space is beginning to heat up, with new developments hoping to bring more investors into the fold. Against the backdrop of ecosystem development, a prominent politician believes that Bitcoin could very well usurp the dollar itself as the world’s global reserve currency.
Bitcoin, the Dollar Slayer
The old statement came from Stephen Harper, Canada’s Prime Minister from 2006 to 2015. In an interview with Jay Martin from investment service Cambridge House, Harper explained that Bitcoin and several Central Bank Digital Currencies (CBDCs) could be merged to form a basket of currencies that would replace the dollar.
Speaking at the Vancouver Resource Investment Conference on Sunday, Harper explained that while many currencies have been billed to replace the dollar, only a large currency – like the yuan or Euro – could pull it off.
The former Prime Minister also expressed doubts over whether any of the currencies he mentioned would be able to pull off the feat. He pointed to the uncertainty over the Euro’s long-term value and China’s possible “arbitrary measures” for manipulating the yuan.
Casting a broader net to include alternative assets, Harper explained that gold might be able to knock the greenback off its perch. Other than that, Bitcoin could join other currencies in a basket. Still, Harper explained that the dollar would most likely be a significant part of that basket too.
Careful Approach Towards CBDC Development
Weighing in on the growing trend of CBDCs, Harper explained that the assets were inevitable. However, they would most likely remain subject to monetary policies around the world. The former Prime Minister expressed concern over central banks becoming some “kind of general banker,” instead of merely acting as financial monitors.
“Ultimately, if you have a digital currency and the purpose of the central bank is to control inflation and create a stable currency and priceability, then digital currency is just kind of an evolution of the marketplace. But if it’s part of a series of what I think are wild experiments as to the role of central banking, then it worries me a lot,” the former politician explained.
Harper’s statement comes as Canada joins the CBDC bandwagon. Last October, The Canadian Press reported that Timothy Lane, the Bank of Canada’s Deputy Governor, commented that Canada was working at a “good pace:” towards its digital currency.
Speaking at a panel discussion hosted by the Central Bank Payments Conference, Lane reportedly claimed that the bank held consultations regarding citizens’ expectations from a CBDC. He pointed out that contactless payments have become a critical point of focus amid the coronavirus pandemic, and they were looking at the best path for rapid development.
The policymaker explained that while Facebook had a solid idea for a cross-border payment network with its Libra stablecoin, central banks will need to be ready if the asset doesn’t get the green light to operate.