199 Interactions, 4 Today
According to a Bloomberg article, he claimed over the phone that Bitcoin is “much too resource-intensive, far too risky, and, most significantly, it does not maintain stability.” He went on to say:
“I mean, the basic property and task for a central bank and central-bank currency is to provide stability in the value of money and in the system, and that is not done by Bitcoin.“
The central bank governor’s remarks on Bitcoin came just days after one of the country’s most influential businessmen, Kjell Inge Rokke, backed the blockchain and argued that it would be on the “right side” of monetary history.
Interestingly, earlier this month, Norwegian industrial giant Aker ASA announced that it had “established Seetee AS (‘Seetee’), a new company dedicated to investing in projects and companies throughout the Bitcoin ecosystem.”
“I want to state upfront that I am aware that Bitcoin is often criticised for a number of perceived challenges, including its electricity consumption, its inability to scale with respect to transactions, and its potential to facilitate anonymous illegitimate payments. We believe that Bitcoin can be a solution rather than a problem for each of those.“
He then explained why Aker had decided to get into the Bitcoin space:
“Aker’s decision to enter Bitcoin through Seetee is the result of a long and fundamental discussion about value. I have been drinking from the firehose since last summer. While this letter is my way of expressing my thoughts on the matter, my insights are largely derived from reading articles and books, listening to podcasts and watching videos, as well as conversations with people around me.“
He then went on to say that Aker had decided that not investing in Bitcoin would be the riskiest decision:
“Risk is not an obvious concept. What’s commonly considered risky is frequently not. And vice versa. We are used to thinking that cash is risk free. But it’s not. It’s implicitly taxed by inflation at a small rate every year. It adds up. Central bankers have magically agreed that they should target two percent inflation, which implies that one third of your money’s worth is taxed away every twenty years. If it was three percent, almost half of it would be gone in that time.“
He later added:
“We believe bitcoin is going to be on the right side of history. But we should remind ourselves that some will resist forcefully: Norway was the last country in Europe to adopt colour tv in 1972, several years after the technology was available.“
Goldman Sachs Global Markets Division global head of digital assets Matt McDermott recently reported that there is “huge” institutional appetite for the flagship blockchain across numerous business categories.
Bloomberg notes that as Bitcoin acceptance increases, central banks are rushing to adapt to widespread cashlessness by creating central bank digital currencies (CBDCs). Ida Wolden Bache, Deputy Governor of Norges Bank, stated in November that the country had become the world’s most cashless country, with just 4% of purchases made using banknotes and coins.
According to Wolden, the aim of Norges Bank’s CBDC is for users to “be able to pay easily and safely in” Norwegian kroner. The CBDC will “make no improvements to private sector credit intermediation.” In addition to bitcoin, Olsen added:
I don’t think at the end of the day it will be a threat to central banks. Although some people talk about that.
Any experts, on the other hand, claim Bitcoin may be a workaround to the market’s upcoming problems. In a recent interview, former hedge fund manager Jim Cramer said that the only way to invest for the forthcoming post-Covid “boom” is to purchase Bitcoin.