NZ Reserve Bank Governor's Joke Sparks Bitcoin Advocates' Unrest, Considers CBDC Launch
Summary:
During a legislative committee session, New Zealand Reserve Bank governor, Adrian Orr joked about the function of central banking, stirring reactions from Bitcoin advocates who interpreted truth behind his humor. Orr expressed concerns over decentralized digital currencies like Bitcoin and stablecoins. The central bank is also considering the implementation of a Central Bank Digital Currency since September 2021.
Did Adrian Orr, the Governor of New Zealand Reserve Bank, just make an unexpected revelation? In a legislative committee session on February 12, Governor Orr quipped about the workings of the modern central banking system to an amused crowd: "Central banking is a phenomenal profession, where you create currency and people have faith in it." Earlier in the session, Orr mentioned that the central bank had encountered various financial difficulties and received numerous requests from ministers to maximise cost efficiency. "We essentially self-fund and then determine what dividends to distribute," stated Orr.
Whether the observation was made in jest or not, multiple Bitcoin enthusiasts seemed to find an underlying truth in Orr’s words. A proclaimed Bitcoin enthusiast posted on February 13 that Orr "voiced the unspoken truth." Bitcoin advocates have consistently proposed that money should be independent from government control, arguing that Bitcoin is the only financial system that operates free from governmental interference. “It’s a scam, and we know it. They know it too, and they know that we know it too,” shared Jameson Lopp, a Bitcoin enthusiast and software engineer. "The only way to triumph is to reject their rules. We should make them conform to our rules instead."
While there isn't a consensus among Bitcoin holders and the larger cryptocurrency community on all matters, most hold the view that central bank digital currencies (CBDCs) will lead to more centralized control over wealth and potentially hamper civil liberties. The hearing was a segment of the central bank's yearly assessment. Orr expressed his critical concern during the session about the increasing prominence of decentralized digital currencies like Bitcoin (BTC), arguing that it doesn't embody the three essential qualities of money. In his opinion, "It doesn't function as a medium of exchange, it doesn't serve as a store of value, and it doesn't qualify as a unit of measure." Orr also displayed his lack of enthusiasm for stablecoins, stating that they do not act as a perfect complement to central bank currency as they lack stability. "Their validity is only as strong as the balance sheet of the entity issuing that stablecoin." Since September 2021, New Zealand has been considering the potential of deploying a CBDC.
Published At
2/14/2024 4:53:31 AM
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