The Deputy Governor of the Bank of Canada recently spoke on the future of digital currencies and further addressed the recent rally of Bitcoin, calling it a ‘speculative mania’.
February 11, 2021 | AtoZ Markets – Deputy Governor of the Central Bank of Canada Timothy Lane called the bullish rally in Bitcoin speculation. He stated that cryptocurrencies are only suitable for “criminal transactions.”
“The recent surge in digital asset prices does not look like a trend, but like a speculative mania. Even in an increasingly digital economy, cryptocurrencies such as bitcoin have no reason to be the money of the future, ”added Lane.
Why Bank of Canada Calls Crypto Boom A Speculative Mania?
According to him, digital assets are only suitable for illegal activities, when “anonymity is superior to all other functions.” Lane noted the high transaction processing fees and the volatile purchasing power of cryptocurrencies.
The top manager called the excitement around the bitcoin price nothing more than speculation, since “one loud tweet is enough to cause a sudden rise in the rate.”
On February 8, Tesla invested $1.5 billion in bitcoin, after which the price of the asset began to rise sharply and in less than a day passed the $48,000 mark. At the time of writing, the first cryptocurrency is trading at $44,400.
Former head of the Treasury’s Office of the Comptroller of the Currency (OCC), Brian Brooks, called Tesla’s investment in bitcoin exciting and daunting at the same time.
Gary Black, former investment director of Goldman Sachs, sold shares in the electric car maker after the company converted some of its reserve funds into digital gold.
As a reminder, the former Prime Minister of Canada Stephen Harper allowed the confrontation between bitcoin and the dollar for the status of a reserve currency.
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