The central bank of Canada is reportedly considering launching its own digital currency, a move that could see it gather more information on where Canadians spend their funds.
According to an internal presentation seen by the Financial Post, the central bank’s digital currency could help it combat the “direct threat” cryptocurrencies pose while helping it collect more information on people’s spending habits.
The presentation was prepared for Governor Stephen Poloz and the central bank’s board of directors. It was presented a two-year research project on whether the Bank of Canada should issue its own digital currency.
Titled “Central Bank Money: The Next Generation” the presentation listed over a dozen benefits to the bank launching a digital currency and only one downside, as it would offer “all the benefits” of a central bank asset, as well as the “convenience and security of wireless, electronic payments.”
The presentation reads:
We need to innovate to stay in the game (…) Cryptocurrencies may become a direct threat to our ability to implement monetary policy and lender of last resort (LOLR) role.
Louise Egan, a central bank spokesperson, noted that the bank hasn’t decided on whether it’ll launch its own digital currency, even though it could help collect information on where people use cash. Research on the topic, Egan said, is still ongoing.
Last year Carolyn Wilkins, a Senior Deputy Governor for the Bank of Canada, revealed she believed cryptocurrencies could exist next to fiat currency. At the time she also revealed the bank was experimenting with blockchain implementations for interbank payments systems using Ethereum and R3’s Corda.
A survey conducted by the Bank of Canada has also revealed 85% of Canadians are “aware” of bitcoin, and that most of those buying the cryptocurrency are doing so as an investment.