Canadian central bank exploring digital currency
Bank of Canada to consider digitisation
Canada's central bank, the Bank of Canada, is investigating the possible development of a digital currency, according to internal documents obtained by The Logic.
A presentation was given to Stephen Poloz, the governor of the Bank of Canada, and the bank's board of directors. It summarised a two-year research project into digitisation of the Canadian dollar (CAD) and was generally supportive of the measure.
The presentation stated: “We need to innovate to stay in the game.” It argued that a digital currency would offer “all the benefits” of central-bank-backed assets along with “all the convenience and security of wireless, electronic payments”.
It also emphasised the need to innovate, lest major corporations should undermine the power of the state: “Cryptocurrencies may become a direct threat to our ability to implement monetary policy and lender of last resort (LOLR) role.”
Facebook’s Libra would seem to be the foremost threat to the existing system, should it eventually launch. A corporate stablecoin pegged to a number of major currencies immediately available to 2 billion customers across borders would be a major threat to traditional states.
The European Central Bank is also developing a stablecoin to stave off any alternative digital methods of exchange.
The presentation also underlined the increasing user information a digital currency could provide to central banks such as: "personal details not shared with the payee, but could be shared with police or tax authorities”.