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Tiff Macklem, the current governor of the Bank of Canada, issues a death knell to traditional finance (TradFi) and predicts its imminent end. It offers a surprising alternative: bitcoin. Details!
Bank of Canada warns: risk of ‘brutal correction’ and ‘systemic stress’
Tiff Macklem differs from Robert Kiyosaki and Arthur Hayes on one point: while the latter two announcethe coming collapse of the dollar and defends bitcoin, Bank of Canada governor sees entire fiat system on edge.
Better to be long bitcoin and short fiat. »
Tiff Macklem, the governor of the Bank of Canada, sounded the alarm when it was published Financial Stability Report. While praising the robustness of Canada’s financial system, he warned of lingering risks that could trigger ” brutal correction “stepsgenerates extensive financial stress.
According to Macklem, some warning signs are already visible: “ Valuations of some financial assets appear to be tight, increasing the risk of a sharp correction. »
He especially highlightedincreasing use of leverage in the non-banking financial sectora factor that could worsen the consequences of a market correction, Bitcoin.com points out.
Carolyn Rogers, senior deputy governor of the Bank of Canada, said that increasing leverage is not yet an issue, but thatit could happen in the event of a rush for liquidity.
This was also highlighted in the annual report of the Bank of Canada a sharp increase in the use of leverage in the Canadian bond and repo markets by hedge funds. This is due to arbitrage strategies associated with the timing and extent of interest rate cuts.
The Bank of Canada dismisses the idea of Bitcoin as a threat to its national currency
Tiff Macklem, Governor of the Bank of Canada recently stated this Bitcoin did not pose an immediate threat to the national currencyand it never has to become one.
He pointed out that predictions about the end of fiat money are repeated: “ Cash has been remarkably resilient, even after the introduction of credit and debit cards and contactless payments. If you look at the growth of liquidity in the economy, it has grown roughly in line with the growth of nominal incomes », We can read in the columns of financial tycoons.
However, the widespread adoption of Bitcoin (BTC) could disrupt the functioning of bankstheir ability to regulate the money supply and maintain financial stability.
However, Macklem admitted it Blockchain technology could bring benefitsespecially in international payments: ” There are some applications of some global currency that could be very useful, such as remittances, which can be quite expensive “.
The comments come after uncertainty hovers over the future Mintchip, the cryptocurrency of the Royal Canadian Mintafter more than two years of development.
Although Canada and the United States share a similar stance on cryptocurrencies, Canada appears to be taking a stricter stance. This difference can be explained by the financial stability of Canada, which was not affected by the 2008 financial crisis as much as its American neighbor.
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The blockchain and crypto revolution is in full swing! And on the day the effects are felt by the most vulnerable economy in this world, I will say against all hope that I had something to do with it
DISCLAIMER OF LIABILITY
The comments and opinions expressed in this article are solely those of the author and should not be considered investment advice. Before making any investment decision, do your own research.
