Bank of Canada contemplating CBDC launch to tackle cryptocurrencies
Virtual assets have come a long way since first being associated with the dark web. Today, there are several countries across the world that are actively contemplating issuing their own digital currencies. Canada has now joined this list.
A recent internal Bank of Canada presentation has revealed that the organization is contemplating the idea of a virtual asset that would help the organization tackle the “direct threat” of cryptocurrencies, while also helping acquire more information about how people spend their capital.
According to an exclusive report, the presentation was prepared for Stephen Poloz, Governor of the Bank of Canada, and the bank’s Board of Directors. The presentation suggested that these assets would co-exist with coins and paper money, while steadily replacing fiat currency.
Stephen Murchison, advisor to the Governor of the Bank of Canada and the man behind the presentation, presented his report as part of a two-year research project. The presentation stated,
“We need to innovate to stay in the game. A digital currency would provide “all the benefits” of a central bank-backed asset, it says, as well as all the convenience and security of wireless, electronic payments.”
Listing over a dozen benefits for the bank, the presentation highlighted something major. It stated that an additional form of payment made the system more “robust.” However, it added that virtual assets were a major risk to stability.
Additionally, the presentation said that a virtual asset would enable users to pay interest on balances, and it would also allow the authorities to collect more information than it is possible when people settle payments in cash. The presentation read,
“Personal details not shared with payee, but could be shared with police or tax authorities.”
The presentation added,
“Cryptocurrencies may become a direct threat to our ability to implement monetary policy and lender of last resort (LOLR) role.”
Replying to an email to media outlet, Louise Egan, Director of Media and Public Relations, informed that the bank was still uncertain with regards to actual launch. He added that the issue of shared information with police and tax authorities was highlighted as “among the many issues that continue to be assessed by Bank researchers.”