Bank of Canada Mulling a Digital Currency That Would Be Police-, and Tax-Friendly
According to The Logic, the Bank of Canada may be toying with the idea of issuing its own digital currency.
An access-to-information request by The Logic turned up an internal Bank of Canada presentation called “Central Bank Money: The Next Generation.”
Prepared by Stephen Murchison, an adviser to Governor Stephen Poloz, the presentation is the result of two years of research.
It outlines the growing risk from upstart cryptocurrencies, which may “become a direct threat to our ability to implement monetary policy and lender of last resort (LOLR) role.”
Bank of Canada would get many advantages from digital currency
Murchison makes it clear in no uncertain terms that the BoC should take the digital route because of a host of advantages available to a central bank digital currency.
“We need to innovate to stay in the game,” he says. “A central bank-backed 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.”
One key, but a rather ominous advantage of a national digital currency listed in the presentation, is the sharing of personal information with the law enforcement or tax authorities.
It appears that the Bank of Canada intends to counter the threat from cryptocurrencies by developing its own digital currency. In addition, the BoC has accepted that banknotes are outdated.
Regardless of the above internal thought process, the official stand of the Bank of Canada is that it has not decided yet on digital currency.
The US Fed also considering a digital dollar
In a significant disclosure, Federal Reserve Bank of Dallas President Rob Kaplan said Wednesday that the Fed is “actively looking at and debating” issuance of a US digital currency.
The primary consideration is the threat from rival cryptocurrencies to the US dollar’s preeminent status as a global reserve currency.
[Related Story: Marshall Islands to issue its own national cryptocurrency]
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