Bank of Canada Governor: Cryptocurrency Trading Is Gambling

January 28, 2018

Bank of Canada Governor: Cryptocurrency Trading Is Gambling

Governor of the Bank of Canada Stephen Poloz refuses to accept cryptocurrencies as real currencies and considers participation in the crypto market a gambling.

He told in an interview with CNBC:

"They are crypto but they are not currencies. I'm not really sure what they are. They are not assets really … I suppose they are securities technically … There is no intrinsic value for something like bitcoin so it's not really an asset one can analyze. It's just essentially speculative or gambling."

Poloz shares the same opinion with Goldman Sachs analysts. He believes that if the crypto bubble bursts it would not affect the wider economy, however Poloz says that it would affect certain segments of a stock market. 

He said:

"One parallel we could draw would be the tech wreck. When we had the tech wreck, that was a much more widespread exposure. And the fact it had barely had perceptible effect on the real economy because it was not a stock market crash but just a segment of the stock market. <...> So I think if you take that experience to heart, if something like that were to happen in the cryptocurrency space, it would probably be smaller today."

Poloz welcomes cryptocurrency regulations in other countries and said that BoC will develop its own regulations. At the same time he stated that it is important not to restrain innovations.

He said:

"I have no doubt that at least for the purposes of consumer protection … We will be developing regulations around this space in due course. But what we are being careful to do here is to not stifle innovation."

At the same, Poloz is a big fan of blockchain technology and called it "a true piece of genius." He believes that it will be implemented in many areas of the world's economy. 

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