Gold Silver Reports – Australia’s central bank chief made a scathing assessment of Bitcoin, saying the cryptocurrency that’s soared above $17,000 is more likely to appeal to criminals than consumers.
“When thought of purely as a payment instrument, it seems more likely to be attractive to those who want to make transactions in the black or illegal economy, rather than everyday transactions,” Governor Philip Lowe said in the text of a speech in Sydney Wednesday. “So the current fascination with these currencies feels more like a speculative mania than ithas to do with their use as an efficient and convenient form of electronic payment.”
Bitcoin has soared more than 1,600 percent this year as people rush to buy the digital currency in the hope it will become a legitimate alternative to gold or traditional money. Lowe’s criticism follows a damning assessment of Bitcoin from his New Zealand counterpart Grant Spencer, who at the weekend said the currency’s gains looked “remarkably like a bubble.”
“The value of Bitcoin is very volatile, the number of payments that can currently be handled is very low, there are governance problems,” said Lowe. “The transaction cost involved in making a payment with Bitcoin is very high and the estimates of the electricity used in the process of mining the coins are staggering.”
“In reality these currencies are not being commonly used for everyday payments and, as things currently stand, it is hard to see that changing,” he added.
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The Reserve Bank of Australia chief’s speech addressed a subject of increasing interest: does it intend to issue a digital form of the Australian dollar? The short answer is no, Lowe said.
Lowe said the case for adding an electronic form of Australian banknotes to the payments mix has not been established, even if it were technologically feasible. The RBA is in close contact with its peers in other countries on this issue and few see electronic banknotes on the horizon, he said. – Neal Bhai Reports
