Why Australia’s most powerful banker has sounded the alarm about Bitcoin – despite it reaching record highs
Australia’s most powerful banker has ruled out Bitcoin playing a significant role in the economy – despite it soaring to a record high – because she doesn’t understand it.
The cryptocurrency is now trading at AU$139,000 as investors get excited about Bitcoin enthusiast Donald Trump becoming the next US president – with a plan to hoard cryptocurrencies for strategic purposes.
But Michele Bullock, governor of the Reserve Bank of Australia, has said she doesn’t understand the fuss.
‘It’s not a coin, it’s not money. It is used as a kind of asset class,” she told the Australian Securities and Investments Commission’s annual forum on Thursday.
‘I don’t understand. I don’t really see a role for it, especially in the Australian economy or payment system. I’m not sure what its purpose is.’
Ms Bullock also dismissed the idea that Bitcoin could be an alternative currency.
‘Don’t call it an alternative currency. That’s not true,” she said, shaking her head, adding that the price increase was simply a case of “more buyers than sellers.”
ASIC chairman Joseph Longo was equally scathing, describing the question of it as the “bigger fool theory” and saying “who cares?” during a panel discussion about the price increase.
Australia’s most powerful banker has ruled out Bitcoin playing a significant role in the economy – despite rising to a record high – because she doesn’t understand it
“It’s something out of nowhere,” he said.
“The environmental impact of creating Bitcoin, to create that stuff you’re using the full power of small, European countries.”
President Trump pledged in July to build a national strategic reserve of Bitcoin and treat it as a government-issued currency.
“I am laying out my plan to ensure that the United States will become the crypto capital of the planet and the Bitcoin superpower of the world, and we will make it happen,” he said.
Raphael Arndt, the chairman of the federal government’s Future Fund, questioned the wisdom of the Americans with a strategic reserve of cryptocurrency.
“If I were the controller of the world’s reserve currency and I could print as much of it as I wanted, and I had a budget deficit as far as I could see, I’m not sure why I would want to have a strategic reserve of money . any currency, let alone one I don’t control or understand,” he said.
Bitcoin has risen 25 percent, from $103,000, since Trump’s election victory over Democrat Kamala Harris.
Reserve Bank of Australia Governor Michele Bullock stated that she did not understand the fuss over Bitcoin
Nick Forster, an Australian Wall Street trader who co-founded Lyra – a decentralized finance platform for buying and selling cryptocurrency – predicted last week that Bitcoin could be worth $155,000 by the end of 2024.
“If Donald Trump secures the presidency, it could lift markets significantly,” he told Daily Mail Australia.
“Such a win could catalyze this move, reflecting investor anticipation of potential regulatory shifts or economic policies that favor the crypto market.”
Ms Bullock’s dismissal of Bitcoin is in stark contrast to her predecessor Philip Lowe’s signal in December 2021 that he supported the idea of a retail digital currency.
Cryptocurrencies allow individuals to pay each other directly without the need for a bank account.
Decentralized finance also means that money can be exchanged without a central bank having to oversee the payment system that determines how banks handle transactions.