Although the Bank of Canada has no plans to immediately issue a digital currency, the Central Bank does not exclude the possibility of launching a mass acceptance because of the possibility of private digital currency – and the possibility of a cashless society.
Deputy Governor of the Bank of Canada, Tim Lane, spoke in FinTech RDV 2020 in Montreal and stated that although there is currently “no matter interesting” to the central bank’s digital currency (CBDC), the prototype is on the road and the bank plans to consult with the various stakeholders interest to potentially design a digital currency from the central bank.
“THE BANK OF CANADA WOULD DESIGN IT TO OFFER THE BENEFITS OF CASH – SAFE, EASILY ACCESSIBLE, PRIVATE AND A GOOD VALUE STORE – BUT IN A DIGITAL VERSION THAT CONSUMERS CAN USE TO PUT THINGS ONLINE OR IN A STORE ELECTRONICALLY TO BUY. “
The Bank sees the potential of commonly used private cryptocurrencies as potential threats to the Canadian dollar. Lane added that:
“IF ONE OR MORE ALTERNATIVE DIGITAL CURRENCIES THREATENED TO BE WIDELY USED AS AN ALTERNATIVE TO THE CANADIAN DOLLAR, A DIGITAL CURRENCY ISSUED BY THE CENTRAL BANK COULD BE USED TO DEFEND MONETARY SOVEREIGNTY.”
Bank for International Settlements has found that the more the central bank is likely to issue its own digital currency in the coming years. Although many of the pilot projects developing countries, China is the most important economic closest issued digital currency. Recently reported that Turkey has begun testing digital e-crown.
It was also reported that Shopify, an important digital platform in Canada, will become a member of the Association Libra Facebook. Libra was officially announced in June 2019. This has led to regulatory concerns around the world since its inception.
Some countries have begun to reconsider the US dollar as the dominant global currency, and banks have recognized that the Libra on Facebook has prompted the central bank to take a serious look at the initiative of digital currency to replace cash.
However, the Bank of Canada quickly assured Canada that the money they will not become obsolete quickly:
“THE BANK OF CANADA WILL ENSURE THAT BANKNOTES ARE AVAILABLE TO CANADIANS WHO WANT TO USE THEM,” SAID VICE GOVERNOR LANE.
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