Economist David Dodge, former seventh governor of the Bank of Canada, believes gold is an “archaic tool” and it is for this very reason that the Canadian central bank has disposed of its gold reserves. While saying that gold is an outdated financial tool, Dodge says that Bitcoin (BTC), a major crypto asset, has no place in the Bank of Canada’s reserves.
David Dodge Bank of Canada “It really doesn’t make sense to hold this antique instrument of stability called gold”
David Dodge, former seventh governor of the Bank of Canada (BofC), believes gold is an outdated means of payment and costly to store. Dodge spoke with Kitco News correspondent David Lynn on Thursday to discuss the shiny yellow precious metal.
According to Dodge, gold is an archaic tool, and Canada’s central bank was right to get rid of it all. Canada is the only G7 country that does not hold any gold reserves. The Canadian central bank’s gold selling trendbegan in the early 2000s, and by 2016 Ottawa had soldmost of its gold reserves.
“There is a very clear problem that holding gold is costly, whereas holding bonds in the US, China, or the euro provides a return,” Dodge told Lin on Thursday afternoon. ‘This is a strong view.’ And it’s a view that the international monetary system is strong enough that holding ‘gold,’ an archaic instrument of stability, doesn’t really make any sense.”
Dodge said he believes in reducing transaction costs and that the issue of digital currency is “a very important one”
Canada followed Britain’s lead and sold half its gold holdings, 395 tons, between 1999 and 2002 395 tons of gold between 1999 and 2002. British citizens dubbed this event “Brown’s Bottom” in honor of Gordon Brown, who served as Minister of Finance from 1997 to 2007. Canada has dubbed it “Poloz’s Bottom” after Stephen Poloz, the ninth president of the BofC. Dodge also touched on digital currencies such as Bitcoin in a discussion with Kitco News on Thursday.
Dodge does not believe that bitcoin (BTC) is worth the BofC’s reserves, but the former central bank governor has not ruled out crypto assets.” The issue of digital currency is a very important one,” Dodge said.” What we want to do globally and [in Canada] is to reduce transaction costs … (In)banks and the Ministry of Finance on this issue of digitizing the financial system to reduce transaction costs… We are working very hard on this… The financial system is interested in digitizing the Canadian dollar.”
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