Adrian Orr Critical of Bitcoin and Stablecoins
Adrian Orr, the governor of the Reserve Bank of New Zealand, expressed his skepticism towards independent digital currencies like bitcoin and stablecoins. According to Orr, bitcoin is not a medium of exchange, store of value, or unit of account. He believes that people attempt to use it as such, but it falls short. Orr also criticized stablecoins, referring to them as “misnomers” and “oxymorons.” He argued that stablecoins are only as reliable as the balance sheet of the entity offering them.
Concerns About Independent Digital Currencies
Orr’s comments came in response to a question about central banks’ concerns regarding independent digital currencies and their potential impact on the international financial system. He stated that central banks are critically concerned about these alternative forms of currency because they often do not deliver what they promise. Orr emphasized the importance of fiat currencies backed by parliamentary power and an independent central bank to maintain low and stable inflation.
New Zealand’s Monitoring of Stablecoins
The Reserve Bank of New Zealand has been closely monitoring stablecoins and crypto assets since June 2023 due to uncertainties surrounding the sector’s evolution and potential risks to the financial system. The bank acknowledges the need for caution and enhanced data and monitoring to better understand these digital assets. As for its own digital currency, the Reserve Bank is still in the exploration phase to determine whether it will introduce a central bank digital currency alongside cash.
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