Reserve Bank of New Zealand governor sparks debate with comments on central banking and Bitcoin

Reserve Bank of New Zealand Governor Adrian Orr’s recent remarks during a parliamentary committee meeting have ignited discussions within the cryptocurrency community. While meant as a jest, Orr’s comments about the nature of central banking and the rise of decentralized digital currencies like Bitcoin have drawn attention and sparked debates on the future of finance.

Governor Orr’s remarks

During the parliamentary committee meeting on February 12, Orr quipped about the workings of central banking, humorously stating, “It’s a great business to be in, central banking, where you print money and people believe it.” 

This lighthearted comment drew laughter from those present, but it also resonated with some members of the cryptocurrency community who saw an element of truth behind Orr’s words.

Bitcoiners’ response

Bitcoin enthusiasts seized upon Orr’s remarks, interpreting them as an acknowledgment of the flaws in traditional central banking systems. Many within the Bitcoin community argue for the separation of money from the state, viewing Bitcoin as a decentralized financial network free from government manipulation. 

They see Orr’s comment as a tacit admission of the perceived shortcomings of centralized monetary policies.

Bitcoin advocate and YouTuber Mike Still highlighted Orr’s statement, suggesting it reflected an underlying truth about central banking practices. Software engineer Jameson Lopp also echoed this sentiment, stating, “We know it’s a scam. 

They know it’s a scam. They know we know it’s a scam.” Lopp emphasized the need for individuals to opt out of traditional financial systems in favor of decentralized alternatives like Bitcoin.

Central bank digital currencies (CBDCs) and Orr’s concerns

Governor Orr’s remarks extended beyond jest as he expressed apprehension regarding the rise of decentralized digital currencies like Bitcoin. He emphasized his concerns by pointing out what he sees as Bitcoin’s lack of the fundamental properties of money, namely as a means of exchange, a store of value, and a unit of account.

Furthermore, Orr voiced skepticism about stablecoins, asserting they do not complement central bank money due to their lack of stability. He cautioned that stablecoins are only as reliable as the balance sheets of the entities backing them. 

Orr’s comments underscored the Reserve Bank of New Zealand’s critical stance on cryptocurrencies and their potential impact on the stability of traditional financial systems.

New Zealand’s exploration of CBDCs

New Zealand has been exploring implementing a Central Bank Digital Currency (CBDC) since September 2021. Orr’s remarks align with the central bank’s cautious approach to digital currencies, reflecting broader concerns about the implications of decentralized financial systems on monetary policy and financial stability.