Central Bank of Canada working on its own digital currency

Debarati  |  Oct 17, 2019

Bank of Canada, the central bank of the country is exploring to issue its own digital currency. This currency will not only combat the threat of cryptocurrencies but also gather information about how people spend money.

In an internal presentation in the Bank of Canada, the presenter shared the most detailed information of this currency. According to the presentation, the currency will be widely available and initially, it will coexist with physical money. Soon with acceptance, all physical money will be removed. According to the presentation, the currency will offer “all the benefits” of central-banked backed assets and “all the convenience and security of wireless, electronic payments.” It also reads, "Personal details not shared with the payee, but could be shared with police or tax authorities,”.

The title of the presentation was “Central Bank Money: The Next Generation”. Stephen Murchison, an adviser to Governor Stephen Poloz, prepared this presentation. The presentation mentioned, “We need to innovate to stay in the game,” and “Cryptocurrencies may become a direct threat to our ability to implement monetary policy and lender of last resort (LOLR) role.”. He also mentioned this to be a two years project deciding if the bank should issue digital currency or not.

Other Bank Exploring own Digital Currency

Back in August, the People’s Bank of China also reported preparing the launch of state-backed digital currency. That currency will help to track the transactions of 1.3 billion citizens better along with a grip on monetary policy.

Crypto & Central Banks

Central banks have stressed the importance of holding monetary controls in explaining their plans for digital currency. The bank of Canada started researching on its digital currency back in 2013. A few weeks ago, the UK's Financial Conduct Authority announced, it will enforce AML regulations on Crypto exchanges, ATMs and wallets.

Bank of Canada stated its proposed digital currency will be more traceable than cash and the tax authorities and police have access to the transaction records.

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