Why Australias most powerful banker has sounded the alarm about Bitcoin - despite it reaching record highs
Australias most powerful banker has ruled out Bitcoin playing any meaningful role in the economy - despite it surging to a record high - because she doesnt understand it.
Australias most powerful banker has ruled out Bitcoin playing any meaningful role in the economy - despite it surging to a record high - because she doesnt understand it.
The cryptocurrency is now trading at AU$139,000 as investors get excited at Bitcoin enthusiast Donald Trump becoming the next American president - with a plan to hoard cryptocurrencies for strategic purposes.
But Reserve Bank of Australia Governor Michele Bullock has declared she doesnt understand the fuss.
Its not a currency, its not money. Its being used as some sort of asset class, she told the Australian Securities and Investments Commissions annual forum on Thursday.
I dont understand it. I dont really see a role for it, certainly in the Australian economy or the payments system. Not sure of the purpose of it.
Ms Bullock also dismissed the idea that Bitcoin could be an alternative currency.
Dont call it an alternative currency. Its not, she said shaking her head, adding the price surge was simply a case of more buyers than sellers.
ASIC chairman Joseph Longo was just as scathing, describing demand for it as the bigger fool theory and saying who cares? during a panel discussion about its price surge.
Australias most powerful banker has ruled out Bitcoin playing a meaningful role in the economy - despite it surging to a record high - because she doesnt understand it
Its something out of nothing, he said.
The environmental impact of creating Bitcoin, to create that stuff, you use the whole power of small, European countries.
President Trump in July promised to build a national strategic reserve of Bitcoin, treating it like a government-issued currency.
Im laying out my plan to ensure that the United States will be the crypto capital of the planet and the Bitcoin superpower of the world and well get it done, he said.
Raphael Arndt, the chairman of the federal governments Future Fund, questioned the wisdom of the Americans having a strategic reserve of cryptocurrency.
If I was the controller of the worlds reserve currency and I could print as much of it as I wanted, and I had a Budget deficit as far as I could see, Im not sure why Id want a strategic reserve of any currency, let alone one I didnt control or understand, he said.
Reserve Bank of Australia Governor Michele Bullock declared she didnt understand the fuss about Bitcoin
Nick Forster, an Australian Wall Street trader who co-founded Lyra - a decentralised finance platform for buying and selling cryptocurrency - last week predicted Bitcoin could be worth $A155,000 by the end of 2024.
Should Donald Trump secure the presidency, it could significantly rally the markets, he told Daily Mail Australia.
Such a victory could catalyse this movement reflecting investors anticipation of potential regulatory shifts or economic policies that favour the crypto market.
Ms Bullocks dismissal of Bitcoin is a stark contrast to her predecessor Philip Lowes signal in December 2021 that he supported the idea of a digital retail currency.
Cryptocurrencies allow individuals to pay each other directly without the need for a bank account.
Decentralised finance also means money can be exchanged without the need for a central bank to have oversight of the payments system governing how banks handle transactions.
