Â© Reuters. âBitcoin is not a digital currency; people don’t spend it ‘
Bank of Canada Governor Tiff Macklem reaffirmed his view that it should not be classified as a currency because it lacks attributes to use in transactions.
Speaking with CTV News, the governor reiterated his skeptical stance on the digital asset. He noted that Bitcoin is irrelevant for day-to-day transactions, even though countries like El Salvador have legalized the flagship cryptocurrency as legal tender.
Despite its anti-Bitcoin stance, many investors continued to adopt Bitcoin as a payment option. However, Macklem believes the current banknote system would persist, although he acknowledged that the pandemic has helped ease the shift to digital transactions. He stated:
Let’s be clear, Bitcoin is not a digital currency. People don’t use Bitcoin to buy thingsâ¦ We have banknotes, and we’re going to have banknotes, at least while I’m governor; they are not leaving. At the same time, we know that our economy is becoming more and more digital, and the pandemic has accelerated this. “
Macklem had said in a previous interview that no digital asset could be considered a currency despite the existence of several cryptocurrencies, suggesting that they are called crypto assets. He argued that international cooperation was needed before the cryptocurrency industry could be streamlined to support large-scale transactions.
The executive also confirmed that the country’s finance ministry is deciding on a possible digital currency issued by the Canadian central bank and that the institution has invested in research for the potential development of a CBDC.
A digital currency is needed given the fierce competition between payment service providers and digital innovation, according to a report released by the central bank. The report also recognizes that the main motivations for the proposed change are the decrease in the use of cash and the role of a CBDC as a countermeasure to the increase in alternative digital currencies.
The Financial Post also reported that the bank has no plans to launch a CBDC soon. However, this position could change if the use of physical cash continues to decline.
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