Carolyn Rogers who is a senior deputy official for the Bank of Canada (BOC) has recently denied the view that cryptocurrencies can be a hedge to curb inflation. He personally argues that cryptocurrencies “do not meet the test” as a source of payment or a stable value.
The statement was in response to a question raised by lawmaker Yvan Baker on whether Bitcoin could be an effective way for ordinary people to escape inflation.
As we all know that countries like Canada and the United States have inflation at the highest level in over 30 years. Canada's annual CPI increase at this point is at 6.7%. Therefore, not surprisingly, many parties are trying to find a way out to face this high inflation rate. Among the considerations is putting ringgit money in Bitcoin investments.
However BoC officials argue that they do not see cryptocurrencies as a way for Canadians to opt out of inflation or a stable source of value.
Bitcoin is often referred to as “digital gold” by industry insiders, due to its limited supply limit of 21 million coins. This makes it immune to monetary devaluation caused by money printing, which is considered the main cause of inflation today.
However, this is opposed by some policymakers. Among them is ECB President Christine Lagarde who argues that Bitcoin is not a true currency, and instead a “highly speculative asset”. Meanwhile, Fed Chairman Jerome Powell has claimed that Bitcoin is neither a suitable store of value nor a medium of exchange.
However, Bank of Canda recognizes Bitcoin and crypto as “important innovations” and the BoC has already stepped into the “development stage” for the possibility of a CBDC, although the decision to adopt the CBDC depends on parliament.
So far BoC MPs have not agreed, some criticize crypto, some others support the use of crypto.
