The former Prime Minister of Canada, Stephen Harper, has said that there may be good reason to use Bitcoin and other crypto currencies as part of a basket of reserve currencies. At present, much of the world's reserve currency is held in U.S. dollars.
Mr. Harper, who served as Prime Minister for 9 years, made the statement as part of an interview with investment service Cambridge House's Jay Martin at the Vancouver Resource Investment Conference. He also stated that he believed that neither the Euro, nor the Chinese Yuan, would ever replace the U.S. dollar as a reserve currency, but that cryptocurrency might be a long-term challenger.
"It's hard to see what the alternative is to the U.S. dollar as the world's major reserve currency. Other than gold, Bitcoin, a whole basket of things [...] I think you'll see the number of things that people use as reserves will expand, but the U.S. dollar will still be the bulk of it."
He added:
"Ultimately, if you have adigital 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."
Earlier this year, it was revealed that China was getting ready to launch its own cryptocurrency backed by a payment system known as Digital Currency Electronic Payment (DCEP). In effect, it will be a digital version of the Yuan, and the creators hope that it will in time come to be a major player in global financial markets and in the micro-economy of China itself.
Chandler Guo, a Chinese cryptocurrency entrepreneur, told BBC News:
"One day everyone in the world will be using DCEP. DCEP will be successful because there are a lot of Chinese people living outside of China - there are 39 million Chinese living outside of the country. If they have a connection with China they will use the DCEP. They can make DCEP become an international currency."
The payments system, that is entirely electronic, has already been rolled out in several Chinese cities as part of a test run, though this has been somewhat hampered by this year's pandemic.
Linghao Bao, a financial analyst from Beijing, added:
"It's hard to predict the timeline but the People's Bank of China is under a lot of pressure to accelerate the development because they do not want to be in a world where Libra (Facebook's digital currency) becomes the global currency, which they think is worse than the current global financial system controlled by the US."
h/t: CoinTelegraph
COMMENTS