The Bank of Canada believes a central bank digital currency could be the answer to the threat that cryptocurrencies present.
The Canadian central bank is reportedly considering launching a proprietary digital currency.
Digital currency could share info with police and tax authorities
On Oct. 16, news outlet The Logic reported that the Bank of Canada is exploring the possible opportunities and challenges related to launching its own digital currency. The central bank purportedly believes that a public central bank digital currency (CBDC) could be the answer to the direct threat that cryptocurrencies apparently present.
The document, titled “Central Bank Money: The Next Generation,” was reportedly prepared for the current Governor of the Bank of Canada, Stephen Poloz, for a September 2018 board meeting and was presented as part of a two-year research project on whether or not the bank should launch its own CBDC.
On Oct. 17, an internal source at the Bank of Canada confirmed to Cointelegraph that the presentation did in fact happen. The author of the document, Stephen Murchison, wrote at the time:
“We need to innovate to stay in the game. […] the CBDC would have all the benefits [of a central bank-backed asset] and all the convenience and security of wireless, electronic payments.”
According to the document, one of the benefits to the Canadian central bank of launching its own digital currency would be the ability to collect more information on its citizens than is possible when people use cash. These personal details wouldn’t be shared with the payee, but could be shared with police or tax authorities, the document reads.
However, in an email to Cointelegraph, Josianne Ménard, spokesman for the central bank, said that the bank had not yet made any decisions as to whether it will launch its own digital coin, adding:
“Our work on CBDC is exploratory, given technological advancements and the important public service that bank notes provide to Canadians.”
China shifts development of CBDC in extra gear
Cointelegraph recently reported that analysts at RBC Capital Markets suggested that stifling Facebook’s Libra may leave the field open to China’s own yuan-backed CBDC to dominate in emerging economies. RBC wrote to clients:
“If US regulators ultimately dismiss Libra and decide not to draft regulations to encourage crypto innovation in the US, China’s CBDC may be strategically positioned to become the de facto global digital currency in emerging economies.”
