The recent boom and interest of corporations in Bitcoin and other cryptocurrencies have alarmed the global regulators, and now many are publicly announcing the risks of such investments. Timothy Lane, the deputy governor of the Bank of Canada, recently spoke on the future of cryptocurrencies and further addressed the recent rally of digital currencies, calling it a ‘speculative mania.’ “The recent spike in their prices looks less like a trend and more like a speculative mania — an atmosphere in which one high-profile tweet is enough to trigger a sudden jump in price,” the deputy governor said.
“Bitcoin does not have a plausible claim to become the money of the future.”
Bank of Canada’s official’s statement came after Bitcoin prices touched a new record following the announcement of Tesla purchasing $1.5 billion worth BTC. The tweet part was justifiable given the swings in Bitcoin prices with tweets from personalities like Elon Musk. Timothy Lane further elaborated that Bitcoin does not have a plausible claim to become the money of the future. The central bank official believes that if private players start issuing digital currencies, it will not be in the interest of the public.
“The issuer would gain control over an enormous range of data.”
Lane further elaborated on the data harvesting by tech companies and explained that it would create a dangerous business model with the mass economy. “If that business model were used as a foundation for the dominant method of payment in the economy, the issuer would gain control over an enormous range of data – bringing with it overwhelming market power,” he opined. The Bank of Canada is also studying the feasibility of issuing its own digital currency and joined a consortium of several other monetary regulators.