In a recent discussion, Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr shared his views on the role of Bitcoin and other digital currencies in the current financial ecosystem.
Doubts about digital currencies
During a parliamentary committee meeting, Orr expressed doubts about Bitcoin’s ability to serve as a “viable alternative” or “complement” to traditional fiat currencies. Orr’s criticism was not limited to Bitcoin but also included stablecoins, which he called one of the financial industry’s “biggest misnomers.”
The Governor of the Reserve Bank of New Zealand (RBNZ) believes that the stability of these digital currencies depends on the financial health of the entities that back them, suggesting that perceptions of their stability can be misleading. The Governor of the Reserve Bank of New Zealand stated:
Stablecoins are not stable. They are only as good as the balance sheet of the person offering the stablecoin.
The comments from the RBNZ president reflect broader concerns within the central bank about the rise of independent digital currencies. Orr noted the “disparity” between the promoted benefits of cryptocurrencies and their actual capabilities.
The Governor of the Reserve Bank of New Zealand further emphasized that fiat currencies backed by legislative power and managed by credible institutions such as independent central banks are critical to maintaining low and stable inflation rates.
Meanwhile, despite Orr’s skepticism, the global trajectory of Bitcoin and other cryptocurrencies tells a different story. Bitcoin, for example, has shown significant growth, solidifying its position as a major asset class.
Recent reports show that Bitcoin has become the tenth largest asset in the world by market capitalization, outperforming industry giants such as Berkshire Hathaway, Tesla, and JPMorgan Chase.
Despite the reservations of some central bankers, the achievement highlights Bitcoin’s growing acceptance and integration into the wider financial sector.
It’s also worth noting that this development coincides with Bitcoin’s market capitalization approaching the $1 trillion milestone, with the current market capitalization exceeding $940 billion. As of this writing, the asset is trading at $48,979, up around 11% over the past week.
Bitcoin future predictions
Analysts and cryptocurrency enthusiasts continue to predict a bright future for Bitcoin amid skepticism from the New Zealand Reserve Bank president. Renowned cryptocurrency analyst Fred Krueger predicts that the value of Bitcoin could soar to $10 million within the next two decades.
An article about adoption and why we will end up with a Bitcoin price of $10MM+ in the next 10-20 years.
In 2019 Tom Lee asked: How many people actually own cryptocurrency? (See clip: https://t.co/OixpXUUyD2)
His answer at the time was 500K. One way he reckons is “encrypted Twitter.” … pic.twitter.com/z2qaH9MAPG
— Fred Krueger (@dotkrueger) February 11, 2024
Similarly, CryptoQuant CEO Ki Young Ju said that the price of Bitcoin may rise by 160%, predicting that the price of Bitcoin may reach $112,000 within this year, or at least remain as low as $55,000.
These optimistic forecasts stand in stark contrast to the central bank’s conservative stance, illustrating the differing views surrounding Bitcoin’s future.
— Ki Young Joo (@ki_young_ju) February 11, 2024
Featured images from Unsplash, charts from TradingView