The head of Canadian apex bank Stephen Poloz has said that the popularity and every minute growing of bitcoin keeps him awake at night.
He confessed that one of the things that makes him to lose sleep: “the noise I keep hearing about cryptocurrencies, especially Bitcoin.”
Poloz who told attendees at the Canadian Club of Toronto in an end of the year speech, said that three of his major worries as we approach 2018 are cyber threats, rising household debt due to the cost of housing, and the difficulties that younger Canadians face when trying to find employment, his speech was titled “Three Things Keeping Me Awake at Night.”
Poloz grievances against bitcoin
Poloz faulted the claim that bitcoin is a cryptocurrency, saying the digital coin lacks one of the features of money: reliable store of value.
“To begin with basics, the term “cryptocurrency” is a misnomer—“crypto,” yes, but “currency,” no. For something to be considered a currency, it must act as a reliable store of value, and you should be able to spend it easily. These instruments possess neither of these characteristics, so they do not constitute “money,” Poloz said.
He said cryptocurrencies are structurally more akin to high-risk securities, although purchasing them resembles gambling more than investing.
“So, what are cryptocurrencies, exactly? Characteristics vary widely but, generally speaking, they can be thought of as securities,” Poloz said in a report by cryptocoinsnews.com
“What their true value is may be anyone’s guess—perhaps the most one can say is that buying these things means buying risk, which makes it closer to gambling than investing.”
Central Banks should Research into Digital Currency
Poloz may not support the bitcoin revolution, but says that Canadian apex bank is digging deep into how financial institutions can be involved.
“It is often forgotten that the cash provided by a central bank is the only truly risk-free means of payment,” he said
He believes that the desire for “digital cash” will continue to increase, providing “strong arguments” that central banks — including the Bank of Canada — should research how to appropriately issue digital currency to meet this perceived need within the legacy financial system.
“All central banks are researching this,” he concluded.