New Zealand Reserve Bank: Bitcoin Could Replace Cash

Geoff Bascand described Bitcoin as a real competitor to cash and said it might one day overtake cash as a preferred currency.

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New Zealand Reserve Bank: Bitcoin Could Replace Cash

In a speech over the weekend at the Royal Numismatic Society in Wellington, Geoff Bascand, deputy governor and operations head of the Reserve Bank of New Zealand, described Bitcoin as a real competitor to cash and said it might one day overtake cash as a preferred currency.

“[Bitcoin] is a very low cost payment method with strong security features and usable for cross-border transactions, making it advantageous in some regards relative to more traditional payment mechanisms,” the International Business Times reported Bascand as saying.

“[Bitcoin] is a very low cost payment method with strong security features and usable for cross-border transactions, making it advantageous in some regards relative to more traditional payment mechanisms.”

Before this weekend, the only real statements the RBNZ had made regarding Bitcoin came from assistant governor John McDermott, who urged banks and businesses to "tread very carefully" with the cryptocurrency, according to BitLegal.io.

Bascand in his speech did note that he believed cryptocurrencies had important drawbacks, specifically price volatility.

“Large swings in the value of a Bitcoin mean its purchasing power fluctuates considerably, and the finite number of bitcoins possibly means that their scarcity value tends to make them more like speculative investment commodities than transactional payment instruments," he said.

Bascand then went on to detail the costs of printing new NZD banknotes, which will be carried out by the Canadian Banknote Company over the next five years. Bascand said the banks spends about NZ$5 million each year printing notes and will have to spend about NZ$80 million over the next five years for a banknote redesign and printing effort, NZ$43 million of which will go to “incremental operating costs.”

Expert commentary

Michal Wendrowski: "Upgrading banknotes in the current age feels like putting another band-aid on a dying old man. The world still needs this man though because he's the only one who is trusted by everybody. People like to have him around. He's part of everybody's life. It would become complicated without him, so he's being kept alive. Young potential successors are growing up though and thanks to the evolution of life, they are resistant to certain dangers and bring advanced features to the world, which might make them very attractive. Nothing comes without a cost though and some of it might be hidden or yet unknown, so we will have keep our eyes open to see who will succeed at replacing the old man called Cash. Sooner or later, no band-aid will be able to prolong his days anymore."

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