Cryptocurrencies, especially Bitcoin, have never been in the limelight as much as they are at the moment. Bitcoin has had a stunning rise in price over the last year or so, with other cryptocurrencies also enjoying similar trajectories, and this has drawn a lot of interest from many people all over the world who may have previously been unaware about crypto. At the same time, those who have been in the loop are talking about Bitcoin hitting the $100,000 mark sooner rather than later. While time will tell if the token does reach those lofty heights, it cannot be denied that Bitcoin, and cryptocurrencies in general, are a lot more prevalent today than they were a couple of years ago, when there was a similar rally, but that was followed by a huge crash, which put many potential investors off from putting their money into cryptocurrencies. That is the key difference this time around, that there is a lot more demand propping up the market, and there are many more practical examples of people using cryptocurrencies for various reasons, which means that it is much less likely that we will see a similar crash in price. Cryptocurrencies were also intended to eventually replace fiat currencies, and while that may still be a pipe dream, there are some who think that this could be a reality sooner rather than later, including a former Canadian prime minister.
Stephen Harper, the aforementioned former prime minister, who is also an economist, recently said that bitcoin could eventually become a reserve currency, similar to the role of the US dollar in international finance, but it would not replace the dollar. The US dollar has been on a significant downward trend in recent years, but the likes of the euro, the pound or the yuan are not widespread enough to offer an alternative. Thus, gold has become a much bigger safe haven than usual in the last few years, and that could be true of bitcoin as well in the time to come, according to Harper.
It is no surprise that a former Canadian prime minister has said this, since there has been a lot of enthusiasm for cryptocurrencies in Canada. One of the biggest examples of this is in the world of the canadian online gambling, where we have seen various online casinos begin to offer players the opportunity to play bitcoin live blackjack in Canada using crypto. A lot of casinos have proven to be extremely popular, and are a growing reflection of the trend in Canadian to accept cryptocurrencies and bitcoin.
However, Harper also laid out some concerns regarding digital currencies, namely that he does not see them as a ‘store of value’, one of the three characteristics for a currency. They do operate as a medium of exchange and a unit of account, but it is difficult to see them as a store of value, since as an investor, it is tricky to see what that investment represents. Nevertheless, it seems as though digital currencies are here to stay, and we are seeing various central banks also explore their own digital coins, or Central bank digital currencies (CBDCs). These may work as long as a natural evolution in the way currencies are thought of, with the same end goal of controlling inflation and price stability, but could be problematic if they are being conducted almost akin to ‘mad scientist experiments’, since that would lead to economic collapse. In any case, Harper did not deny that cryptocurrencies and digital currencies are here to stay, and that they do represent a significant opportunity to reform economic systems, if planned carefully.