RBC chief financial officer Rod Bolger says that in addition to being an environmental disaster and an enabler of terrorism, bitcoin just doesn’t do what a digital currency should, namely, allow for the quick and safe exchange of value.
Bitcoin, ethereum and the rest of the cryptocurrencies have been front page financial news for over a year now as values have skyrocketed and investors sitting on the sidelines have been struck with pangs of FOMO —fear of missing out— even as prices continue to dip and soar on an hourly basis.
Those fluctuations were enough to force some banks in the United States and Canada to restrict customers from using their credit cards to purchase cryptocurrencies. Last week, TD Bank announced it was halting such transactions so it could conduct a review of the crypto-market, saying that the move was made to “serve and protect our customers, as well as the bank,” according to a TD spokesperson.
When asked if RBC was intending a similar prohibition, Bolger said nothing was planned for the moment, while at the same time he admitted legitimate concern about bitcoin and the rest. “At this point, we have not restricted that activity for clients,” says Bolger in conversation with BNN. “Certainly, cryptocurrencies are in the news a lot, and certainly the blockchain technology is something that we’re exploring for financial transactions in a safe manner.”
“I think there’s a place for some [cryptocurrencies],” he says. “They’re a litmus test for the chaos that’s out there in the market. Some people are thinking that cryptocurrencies are like gold, someplace safe to put your money, but there’s a lot of concern about cryptocurrency.”
Bolger pointed to the energy use problem involved in mining cryptocurrencies, where facilities require tens and even hundreds of megawatts in computing power to verify transactions for currencies like bitcoin. (Some estimates have put the daily consumption of electricity to be equal to that needed to power whole countries the size of Ireland or Finland.)
But moreover, Bolger says that bitcoin commits the cardinal sin of currencies, in that it just doesn’t work as a value transfer technology. “It’s supposed to be a safe and cheap way for people to pay money back and forth and that was the intention. Instead, it’s actually been a very expensive way to move money and it hasn’t been safe,” says Bolger.
“There’ve been a lot of examples where the bitcoin has disappeared, and it’s also been used frequently for terrorist financing, so it’s getting outside of the financial system where all the banks are spending a lot of money to help make the world a safer place,” says Bolger. “We don’t want there to be shadow financial systems that make the world a less safe place.”
The Bank of Nova Scotia has said that it is also looking into how to deal with cryptocurrencies, saying that the regulatory and risk factors continue to evolve and that they are reviewing their policies surrounding cryptocurrencies.