Bitcoin could be part of a basket of reserve alternatives to the U.S. dollar, according to former Canadian Prime Minister Stephen Harper.
Stephen Harper, who was prime minister of Canada for nine years, says there could be a place for Bitcoin and central bank digital currencies as part of a basket of reserve currencies to replace the dollar.
Bitcoin, a possible alternative to the U.S. dollar?
In an interview with Jay Martin of investment service Cambridge House at the Vancouver Resource Investment Conference, Harper said the possibility of the U.S. dollar being replaced could only come from a major currency like the euro or the Chinese yuan. He expressed his doubts that either would be a viable alternative currency. First, given the long-term uncertainty about the value of the euro. Second, because of the „arbitrary measures“ the Chinese government would take regarding the value of the yuan:
It is hard to see what the alternative is to the U.S. dollar as the world’s major reserve currency. Other than gold, bitcoin, a whole basket of things […] I think you’ll see the number of things that people use as reserves will increase, but the U.S. dollar will still make up the bulk of it.
Central bank development worries
The former prime minister added that he thought digital central bank currencies, or CBDCs, were „inevitable“ to some degree. But they would likely be subject to monetary policy around the world. Harper said he was concerned about central banks becoming „sort of general bankers“ rather than just a financial overseer. Something that could affect the adoption of any CBDC:
Ultimately, if you have a digital currency and the purpose of the central bank is to control inflation and create a stable currency and price stability, then the digital currency is just a kind of evolution of the market. But if it’s part of a series of what I think are wild experiments in terms of the role of the central bank, then it worries me a lot.
Harper served as prime minister of Canada from 2006 to 2015, and crypto and blockchain adoption in the country has expanded significantly since his departure. In September, Canada even got its first regulated crypto exchange. According to Timothy Lane, deputy governor of the Bank of Canada, the bank is also moving forward with the development of a CBDC.