By On October 15th,2019, the central bank of Canada hinted that it is considering launching a national digital currency that would eventually replace cash and combat the ‘direct threat’ cryptocurrencies pose to monetary controls.
This is according to a presentation acquired by news agency logic, which was prepared by Stephen Murchison, who is tasked with spearheading the bank’s digital currency research.
It was made as a part of a two-year research project that decides whether the bank should issue its own digital currency or not. It offers the most detailed public insight yet into the bank’s thinking on a registered digital coin.
According to the presentation, the digital currency would be widely available, and would at first coexist with coins and paper money, eventually replacing them completely.
A part of the presentation reads:
“A digital currency would provide all the benefits of a central bank-backed asset, as well as all the convenience and security of wireless, electronic payments.”
The Bank of Canada also noted that its digital currency would be more traceable than cash, allowing authorities to have access to Canadians’ transaction records.
What Would This Mean for Canadians?
If a national digital currency is adopted, Canadians will lose access to central bank money. However, the bank’s ability to carry out monetary policy and act as a lender of last resort would not be affected.
Cryptocurrency use in the country is growing. A July 2018 study from the bank found 5% of Canadians owned Bitcoin, up from 2.9 % the year previous.
More Central Banks Forced to Adopt Crypto
Canada is now one of the many nations that are exploring digital currencies as a replacement for cash. Quite recently, Switzerland’s central bank also started exploring the uses of cryptocurrencies for trading.
Global regulators and central bankers have been concerned over the implications of digital money, since the announcement of Libra and reports of China launching its own digital currency.
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