New Zealand Reserve Bank Governor Adrian Orr does not appear to be a fan of independent digital currencies, including Bitcoin and stablecoins. RBNZ’s Adrian Orr says Bitcoin will ‘in no way’ replace fiat money. Regarding stablecoins, Orr looks at the stability claim from a different perspective.
Heavy criticism from the Central Bank President to stablecoin and Bitcoin!
Bitcoin is not a medium of exchange, Adrian Orr told a parliamentary committee on Monday. Orr says that, contrary to claims, BTC is not a store of value or a unit of account. MB President said, “But people are trying to use it this way. They have other purposes as well. However, it does not replace central bank money. “It’s not even complementary,” he says.
Adrian Orr is also critical of the stablecoin issue. Orr argues that these are “the biggest misnomers, such as hedge funds,” and “oxymorons.” In this context, the chairman of the Central Bank said, “Stablecoins are not stable. “They are only as good as the balance sheet of the person offering that stablecoin.” says.
Are central banks worried?
Adrian Orr commented on Bitcoin and stablecoins in response to a question about whether central banks around the world are concerned about independent digital currencies versus central bank fiat currencies and their potential impact on the international financial system. “The answer is yes, they are seriously concerned,” Orr said. Often what is advertised on the tin for these purported alternatives to central bank cash is not what is inside the tin.” He comments
Orr notes that fiat currencies like the New Zealand dollar have the power of parliament behind them. He also notes that they exist because they are a reliable institution, like an independent central bank.
“We agree that we need to be careful!”
Last June, New Zealand’s central bank said it was increasing its monitoring of stablecoin projects and crypto assets due to the uncertainties surrounding the development of the sector and the potential risks they could pose to the financial system. Ian Woolford, director of money and cash at the Reserve Bank of New Zealand, said: “We agree there is a need to be careful. “This reinforces the need for improved data and monitoring to build understanding.”
Regarding the central bank’s own digital currency, it said last year that it was still in an exploratory phase to determine whether it would introduce a digital currency alongside cash.
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