Why Australia's most powerful banker has sounded the alarm about Bitcoin - despite it
reaching record highs
Why Australia's most powerful banker has sounded the alarm about Bitcoin - despite it reaching record
highs
Reserve Bank chief rules out role for Bitcoin
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By STEPHEN JOHNSON, ECONOMICS REPORTER FOR DAILY MAIL AUSTRALIA
Published: 05:37 GMT, 14 November 2024 | Updated: 05:37 GMT, 14 November 2024
Australia's most powerful banker has ruled out Bitcoin playing any meaningful role in the economy -
despite it surging to a record high - because she doesn't understand it.
The cryptocurrency is now trading at AU$139,000 as investors get excited at Bitcoin enthusiast Donald
Trump becoming the next American president - with a plan to hoard cryptocurrencies for strategic
purposes.
But Reserve Bank of Australia Governor Michele Bullock has declared she doesn't understand the fuss.
'It's not a currency, it's not money. It's being used as some sort of asset class,' she told the
Australian Securities and Investments Commission's annual forum on Thursday.
'I don't understand it. I don't really see a role for it, certainly in the Australian economy or the
payments system. Not sure of the purpose of it.'
Ms Bullock also dismissed the idea that Bitcoin could be an alternative currency.
'Don't call it an alternative currency. It's not,' she said shaking her head, adding the price surge was
simply a case of 'more buyers than sellers'.
ASIC chairman Joseph Longo was just as scathing, describing demand for it as the 'bigger fool theory'
and saying 'who cares?' during a panel discussion about its price surge.
Australia's most powerful banker has ruled out Bitcoin playing a meaningful role in the economy -
despite it surging to a record high - because she doesn't understand it
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'It's something out of nothing,' he said.
'The environmental impact of creating Bitcoin, to create that stuff, you use the whole power of small,
European countries.'
President Trump in July promised to build a national strategic reserve of Bitcoin, treating it like a
government-issued currency.
'I'm laying out my plan to ensure that the United States will be the crypto capital of the planet and
the Bitcoin superpower of the world and we'll get it done,' he said.
Raphael Arndt, the chairman of the federal government's Future Fund, questioned the wisdom of the
Americans having a strategic reserve of cryptocurrency.
'If I was 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'd want a strategic reserve of any
currency, let alone one I didn't control or understand,' he said.
Bitcoin has surged by 25 per cent, from $103,000, since Trump's election victory over Democrat
Vice-President Kamala Harris.
Reserve Bank of Australia Governor Michele Bullock declared she didn't understand the fuss about Bitcoin
Nick Forster, an Australian Wall Street trader who co-founded Lyra - a decentralised finance platform
for buying and selling cryptocurrency - last week predicted Bitcoin could be worth $A155,000 by the end
of 2024.
'Should Donald Trump secure the presidency, it could significantly rally the markets,' he told Daily
Mail Australia.
'Such a victory could catalyse this movement reflecting investors' anticipation of potential regulatory
shifts or economic policies that favour the crypto market.'
Ms Bullock's dismissal of Bitcoin is a stark contrast to her predecessor Philip Lowe's signal in
December 2021 that he supported the idea of a digital retail currency.
Cryptocurrencies allow individuals to pay each other directly without the need for a bank account.
Decentralised finance also means money can be exchanged without the need for a central bank to have
oversights of the payments system governing how banks handle transactions.
Donald Trump
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