Bitcoin and national digital currencies (CBDCs) could potentially bolster the basket of reserve currencies and offer an alternative to the US dollar. This view was voiced by former Canadian prime minister Stephen Harper.
In an interview with Jay Martin of Cambridge House Internation, the former official noted that digital versions of the yuan and the euro could challenge the US dollar. At the same time, he doubted that a CBDC could fully replace the American currency. The reason lies in the long-term uncertainty surrounding the value of the single European currency and the “specific measures” by Chinese authorities regarding the yuan’s exchange-rate formation.
“It is not easy to find an alternative to the dollar as the main reserve currency. If you exclude gold and Bitcoin, the number of contenders for that role will grow, but the US dollar will still form a substantial part of the basket,” he said.
Harper noted the “inevitability” of CBDCs as a monetary policy tool worldwide. The former prime minister is concerned that, with their emergence, central banks will become “a kind of universal bankers,” amplifying their role in the socio-economic system.
“If a CBDC appears, and the regulator’s task is to control inflation and create a stable currency, then the digital currency will become the next link in the evolution of the market. But I am worried if it ends up at the center of ‘wild experiments’ as a tool of centralized banking,” he added.
The Bank of Canada was among the first to begin researching and developing a CBDC. In October, the regulator’s head, Tiff Macklem, said that in their creation the country should adhere to coordinated approach.
Earlier, Matthew Graham, head of the blockchain startup Sino Global Capital, said that the digital yuan threatens the dollar’s global hegemony.
The head of the European Central Bank (ECB), Christine Lagarde, stated the need to regulate Bitcoin, noting that the creation of a digital euro could take up to five years.
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