Stephen Harper, an economist and former Prime Minister of Canada, said Bitcoin could potentially be used as a reserve currency, but it will not replace the US dollar’s international role.
In an interview with Jay Martin of Cambridge House on Sunday, Harper admitted the dollar was in a downtrend but said that there were few viable international alternatives even when looking at the euro and the yuan.
“If the US doesn’t turn into a catastrophe, it’s hard to see what alternative there is to the US dollar as the world’s most important reserve currency. Unless you know gold, bitcoin, … a whole basket of things, right? “said Harper.” I think you will see the number of things people use as reserves will increase, but the US dollar will still make up most of it. ”
Harper stressed that he was not an expert on digital currencies, but said it was difficult to see how they act as a store of value – something that is “quite critical” to a currency.
The former Conservative Prime Minister stated that every currency has three purposes: as a medium of exchange, as a unit of account and as a store of value. He acknowledged that a digital currency is certainly a medium of exchange and can be a unit of account, but it is difficult to see how bitcoin can act as a store of value.
That’s because “as an investor, I have no idea what that investment is,” he said.
Harper also touched on the trend for central banks to consider introducing their own digital currencies.
“If you have a digital currency and the central bank’s purpose is to control inflation and create a stable currency and price stability, then ultimately the digital currency is just a kind of evolution of the market,” he said. “But if it’s part of a series of what I believe to be wild experiments on the role of central banking, I am very concerned.”