Canada wavers on MNBCs
The Bank of Canada released a note this week that looks at the case for a potential Canadian MNBC. In it, the authors discuss ” the innovation and competitive arguments that could justify the issuance of a central bank digital currency.”
Canada’s central bank has been talking about a local MNBC for more than a year: at the time, it laid out two scenarios that would help justify the introduction of such an asset. The Bank of Canada planned to consult widely, but did not commit to a response on its decision.
The Bank of Canada appears to have moved forward, however, as this new report is clearly in the “pro” camp with respect to the development of a CBM. It points out that a central bank digital currency would be particularly appropriate if the use of cash becomes more scarce. The report also raises the possibility of mass adoption of cryptocurrency :
” While cryptocurrencies (such as Bitcoin) and stablecoins (such as Tether) have received media coverage, their use as a means of payment in Canada remains, at this time, a novelty carried by a small number ofamateurs. »
A CBDM “probably needed”?
The report notes one area where a CBDM could support Canada’s economy: competition within the financial sector. According to the Central Bank,
“[A digital currency] could improve the choice available to consumers, giving them the option of a store of value not held by a bank. that is not risky.
The Bank of Canada also notes that an MNBC would support the emerging digital economy. In particular, it cites the Internet of Things and smart contracts, which could become key tools for the country’s future economy.
Hence this conclusion from the report:
” In general, we believe that a CBM could be beneficial ‘and probably necessary’ to ensure we have a vibrant and competitive digital economy. “
For now, of course, nothing has been officially announced. But this latest report from the Bank of Canada seems to set the stage for the development of a digital Canadian dollar in the future.
Receive a summary of the crypto news every Sunday And that’s it.
About the author : Marine Debelloir
Deputy Editor-in-Chief on Cryptoast, I fell into the crypto-currency pot a few years ago. I’m passionate about the innovative technologies that come from blockchain and I love digging up the juiciest news to share with you.
All articles by Marine Debelloir.