Lars Rohde, the Governor of the Central Bank of Denmark, has said that he has no appetite for crypto nor he wishes to take it seriously for the time being. He thinks that the country’s central bank does not see crypto as something harmful against the bank’s interests. However, he argues that the danger will trigger if national tech companies integrate crypto for transactional purposes and start to rely on them heavily.
Governor of Denmark’s Central Bank, Lars Rohde was found speaking about cryptocurrencies and their existence in the country. His talk over crypto was duly recorded in an interview organized in Copenhagen by Bloomberg on 26th May (Wednesday), 2021.
The interviewer asked the Governor firstly whether he agrees that crypto is a potential threat to the national or international economy. In response, Rohde said that the bank is aware that crypto usage is rising globally. However, he made a point that he has failed to see any potential threat posed by crypto usage within and outside Denmark.
The next question he faced was whether he was considering the matter of crypto taking over fiat. In his response, Governor replied that he may or may not be inclined to accept this argument. However, as per his understanding, the word “currency” is particular for fiat and not for any “crypto”. He stated that the word has been largely misused in the present day and there are elements that are trying to mold public opening. He said that the concept of currency is centuries old and it is not something that could be taken over that easily. He argued that out of the two i.e. fiat and crypto, the only fiat is that thing that fulfills the criteria of being a “currency”. Therefore, the only fiat is the solution to the problem of what is and what is not the store of value.
He continued his argument by suggesting that though crypto has some qualities which are normally found in fiat. For instance, both have been used for the purposes of executing transactions. However, he does agree that fiat is not a store of value while crypto is. He expressed that his understanding is in fact to the contrary of this perception of crypto – a store of value. Though there is a lack of guarantee and stability from both sides, however, as compared to fiat, there is huge instability within crypto.
Rohde referred to the recent Bitcoin drop to support his argument of high instability and volatility. He stated that people have seen recently that when the crypto market crashes, it crashes sharply. Bitcoin lost a trillion in capital and US$ 30,000 against each unit. Isn’t it something to be afraid of, Rohde posed a counter-question?
He concluded by saying that there is of course a rivalry going on between fiat and crypto. But this rivalry will be put at the ease by the central banks globally.