Bank of Canada Gov says Investing in Bitcoin is Gambling

Bank of Canada Governor calls buying Bitcoin gambling, then turns around to admit central bank is exploring developing its own digital currency.

Don’t you just love it when political big wigs contradict themselves while paving the way for their own agendas? It makes for great headlines, that’s for sure. But it does nothing to help the progress of the people. Someone should mention that to Bank of Canada‘s governor, Stephen Poloz.

In preparation for today’s live interview with Peter Armstrong on CBC‘s On The Money, Poloz commented on major issues facing the country.

He spoke of the housing market and household debt, and rising costs that will likely become a long term issue. He mentioned the need for more “on-the-job training programs” to help young people fill an expanding gap in employment.

Poloz also commented on cyber security risks for the financial system’s infrastructure. He called internet banking methods “a public good, every bit as a important to the health of Canada’s economy as our roads, bridges and airports.” However, he fears that the billions of dollars transacted by Canadian’s each year online are not free of risk.

He said that our connectivity online results in an undeniable vulnerability. Mostly, his fears stem from the fact that “a problem in one institution may spread to others and be amplified.” Thus it would only take a single “successful cyber attack” to “become a successful attack on many.”

Over the years, government-level cyber security – such as the security measures implemented by all members of the central bank – has been effective. But according to Poloz, everyone who shops or pays bills over the internet, or uses things like online gambling sites, could eventually be at risk.

And speaking of gambling, Poloz also said…

Buying Bitcoin is Gambling

In his closing comments, the BoC governor spoke of the growing popularity of the crypto-currency known as Bitcoin, and other digital currencies like it. He expressed concern over the rising interest in digital currency investment, and the mystery behind their alleged value.

“What their true value is may be anyone’s guess,” Poloz quipped. “Perhaps the most one can says is that buying these things means buying risk, which makes it closer to gambling than investing.”

Poloz made it clear that he doesn’t approve of investing in Bitcoin or other crypto-currencies. Yet in the same breathe, he acknowledged the central bank’s potential need to develop a digital currency of its own.

He believes the rising propensity for electronic transactions could be the catalyst for a new demand in electronic cash. And if that’s the case, the central bank could see this as a viable argument for producing its own version. It’s not only a possibility, but something the Bank of Canada is already investigating.

“Bank staff are exploring the circumstances under which it might be appropriate for the central bank to issue its own digital currency for retail transactions,” admitted Poloz.

So, what he’s saying is…

Buying Bitcoin and investing in existing digital currencies is nothing more than gambling. We shouldn’t do that, since the risk element is higher than traditional investment opportunities. But we should support the central bank’s potential need to create a digital currency of its own. Okay. Got it, Poloz. Thanks for the heads up!