Tiff Macklem, current governor of the Central Bank of Canada, sounds the death knell for traditional finance (TradFi), predicting its imminent end. He offers a surprising alternative: bitcoin. Details !
The 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 announce theupcoming collapse of the dollar and advocate bitcoin, the governor of the Bank of Canada sees the entire fiat system on the brink of the precipice.
Better to be long Bitcoin and short fiat. »
Tiff Macklem, Governor of the Bank of Canada, sounded the alarm when publishing the Financial Stability Report. While praising the robustness of the Canadian financial system, he warned of persistent risks that could trigger a ” brutal correction ” stepsgenerating widespread financial stress.
According to Macklem, some warning signs are already visible: “ Valuations of some financial assets appear to have become strained, increasing the risk of a sharp correction. »
He particularly highlighted theincreasing use of leverage in the non-bank financial sectora factor which could worsen the consequences of a market correction, underlines Bitcoin.com.
Carolyn Rogers, senior deputy governor of the Bank of Canada, said that increasing leverage was not yet a problem, but thatit could become so in the event of a rush for liquidity.
The Bank of Canada's annual report also highlighted a sharp increase in the use of leverage in the Canadian bond and repo markets by hedge funds. This is driven by arbitrage strategies linked to the timing and magnitude of interest rate cuts.
The Bank of Canada rejects the idea of a Bitcoin threat to its national currency
Tiff Macklem, Governor of the Bank of Canada, recently stated that Bitcoin did not pose an immediate threat to the national currencyand may never become one.
He stressed that predictions about the end of fiat money are recurring: “ Cash has been remarkably durable, even with the introduction of credit and debit cards and contactless payments. If you look at the growth of liquidity in the economy, it has increased roughly in line with the growth of nominal income », we can read in the columns of Finance Magnates.
Widespread adoption of Bitcoin (BTC), however, could disrupt the functioning of bankstheir ability to regulate the money supply and maintain financial stability.
However, Macklem admitted that blockchain technology could offer benefitsparticularly in international payments: “ There are some applications of some kind of global currency that could be very useful, for example remittances, which can be quite expensive “.
These comments come after the uncertainty hovering over the future of Mintchip, the cryptocurrency of the Royal Canadian Mintafter more than two years of development.
Although Canada and the United States share a similar attitude towards cryptocurrencies, Canada appears to be taking a stricter stance. This difference could 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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