Cryptocurrencies are not a risk to the economy, but we are following this market closely, said Paul Beaudry, vice president of the Central Bank of Canada, in answering a question about cryptocurrencies at an online event this Tuesday (23).
Although her presentation focused on real estate in Canada, where Beaudry raised her concerns, the subject of cryptocurrencies came up as some people questioned the topic.
In addition to Bitcoin, his talk also addressed the difference between cryptocurrencies and stablecoins. According to Beaudry, the latter pose a greater risk to the economy as they can be used more as a means of payment. Remember that stablecoins are issued by entities that can be easily barred, unlike BTC which is completely decentralized.
Central Bank of Canada maintains its position, bitcoin is not currency
When asked whether cryptocurrencies and cryptoactives are a risk and what is their relevance, the deputy governor of the Central Bank of Canada (BCC) reinforced the opinion issued by the BCC earlier this month, that Bitcoin is not a digital currency and the people don’t use it.
Furthermore, Beaudry was indifferent to cryptocurrencies like Bitcoin, claiming they are not directly linked to the financial system. Despite this, he pointed out that as they grow, their risks also grow as more people invest in them.
“We’re not yet at a time where we think that [as criptomoedas] are creating a great risk to the economy, but it is something that we are following closely, very closely”
You need to separate cryptocurrencies, such as Bitcoin, from stablecoins
Beaudry also drew distinctions between Bitcoin and stablecoins, claiming that the latter can play a much larger role in the economy than cryptocurrencies themselves.
According to his thesis, stablecoins are backed by a real asset, such as the dollar, however, it is worth remembering that the dollar has no backing and only loses its purchase value.
“Stablecoins, which are not like Bitcoin and are backed by real assets, they have the potential to play a bigger role in payments and that’s also something we’re looking at.”
The vice president of the BCC also emphasized that cryptocurrencies are purely speculative assets and that they do not play the role of money in the economy. Despite this, BTC has gained a lot of adoption this year with more and more people interested in earning their salaries at BTC, including some US city mayors.
“In terms of how they affect payments, most cryptocurrencies are sold as an idea that they are widely used as payments but they don’t have that payment role. Most of them are much more focused on the speculative part, where people buy mainly to speculate. We don’t see them being used as much as a means of payment right now.”, said Paul Beaudry, deputy governor of the Central Bank of Canada.
Finally, the important thing for the Central Bank is that it continues to rule the economy of its citizens, with its money losing purchasing power with each passing year. Beaudry’s speech makes it clear that if Bitcoin continues to grow, they will already be ready to try to curb its adoption.