The chief of Bank of Canada, Stephen Poloz said that the hoopla around Bitcoin keeps him awake at night. He was speaking during the year-end speech titled “Three Things Keeping Me Awake at Night” at the Canadian Club of Toronto.
In his speech, Poloz told those present at the club that cyber threats remain one of the his chief concerns heading into the new year. The other concerns that he pointed out were rising household debt due to the cost of housing and younger Canadians facing difficulties to find employment.
Referring to the current trends in crypto market, Poloz said “the noise I keep hearing about cryptocurrencies, especially Bitcoin.” The Bank of Canada chief took on the anti-crypto mantle saying that the term “crypto currency” is a misnomer. A currency is a reliable store of value and you should be able to spend it easily, and it does not possess either of these characteristics, said Poloz.
He further added that buying crypto currencies is more of a gambling activity than investment. He raised question of what is the true value of these currencies.
Towards conclusion of the speech, he said it is normal for anyone to move outside of the central banking system looking for better. He added that those who are attracted towards the idea of making money often forget that the cash provided by a central bank is the only truly risk-free means of payment.
Nevertheless, Poloz expressed that “digital cash” will continue to increase in the as the world moves deeper into the digital age. He confirmed that all central banks are researching it, including the Bank of Canada.
The value of Bitcoin has appreciated by an unbelievable 1800 percent this year. According to coinmarketcap.com website, the crypto currency is currently trading at $18,140. The combined market cap of the crypto currencies is $553 billion, with Bitcoin contributing a majority share of 55 percent.