Stephen Harper, an economist and former Canadian prime minister, said bitcoin could potentially see its use as a reserve, but it is not going to replace the international role of the US dollar.
In an interview with Jay Martin of Cambridge House on Sunday, Harper acknowledged that the US dollar has been on a decline but said there were not many viable international alternatives, even when looking at the euro and the yuan.
“Unless the United States becomes a disaster, it is difficult to see what the alternative is to the US dollar as the world’s major reserve. Other than you know gold, bitcoin [and] a whole basket of things, right? ”Said Harper. “I think you will see that the number of things people use as reserves will expand, but the majority of it will still be US dollars.”
Harper stressed that he is not an expert in digital currency, but said it is difficult to see how they function as a store of value – something “quite critical” for currency.
The former Conservative prime minister explained that all currencies have three purposes: as a medium of exchange, as a unit of account and as a store of value. He acknowledged that 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 “I, as an investor, have no idea what this investment represents,” he said.
Harper addressed the trend for central banks to also be considering launching their own digital currencies.
“Ultimately, if you have a digital currency and the central bank’s purpose is to control inflation and create stable currency and price stability, then digital currency is just a kind of evolution of the market,” he said. “But if I think it’s part of a series of wild experiments about the role of central banking, then that scares me a lot.”