Tiff Maclem: “cryptocurrencies will not replace fiat money”

Bank of Canada Governor Tiff Maclem criticized bitcoin and said that while he is the head of the Central Bank, paper money will be in use.

Despite the widespread popularization of bitcoin among institutional investors, some skeptics are not ready to accept cryptocurrency. Among them is the head of the Central Bank of Canada, Tiff Macklem. He stated that he recognizes some of the value of cryptocurrency, but the traditional fiat money system will last for a long time.

“Bitcoin is not a digital currency. People don’t use bitcoins for shopping. We have banknotes and, at least as long as I am the governor of the Central Bank, they will not go anywhere. ”

Maclem believes that the growth of the cryptocurrency market is due to the acceleration of the development of the economy, which is becoming more digital in connection with the coronavirus pandemic. He believes that despite the existence of many cryptocurrencies, none of them can be considered a currency. According to the regulator, bitcoin is an analogue of gambling.

Previously, the Bank of Canada worked with the central banks of the G7 countries on the development of the state digital currency. However, according to the results of research, the Central Bank decided that the country will not launch its own cryptocurrency yet. This could change if the physical use of fiat money declines.

Many institutional investors in Canada are using Bitcoin as a way to hedge their risks amid rising inflation. According to the latest data from Statistics Canada, inflation in the country is 4.4% in October, up from 4.1% in August. The Central Bank expects inflation to be around 5% by the end of this year, above the set target of 2%.

Recall that from June 1, 2020, Canada began to regulate the work of all cryptocurrency companies. They are now required to register with the Financial Transactions and Reporting Analysis Center of Canada (FINTRAC).