A Bank of Canada official provides a detailed defense on why the central bank should issue a “digital loonie” instead of relinquishing control to private cryptocurrencies that could become economic gatekeepers.

The Bank of Canada has developed its own digital currency, one of several central banks that are doing the same development in case there is a need to issue.

Deputy Governor Timothy Lane said in a speech on Wednesday that the bank saw no need for a central bank digital currency, even though the pandemic had accelerated the transition to a digital economy.

However, according to Lane, that could change if there is a tipping point where cash is no longer widely available in Canada.

Continue reading:

The bitcoin craze is back. Is it different this time?

The story continues under the advertisement

He said any digital currency should come from the central bank to ensure that the public interest, rather than private sector profits, is the top priority.

Only a central bank can guarantee that privacy rights will be respected, competition will be fostered and universal access will be created for people in remote communities, Lane said.

Many technology companies collect user data as part of their business model to better align products and services, creating a cycle that brings in more business and generates more data.

Continue reading:

Bank of Canada among the central banks studying the use of digital currencies

“If this business model were used as the basis for the predominant payment method in the economy, the issuer would gain control over an enormous range of data – which brings with it overwhelming market power,” Lane said in the text of his speech.

“Indeed, a tech company could become the gatekeeper of the entire economy, affecting privacy, competition and inclusion.”

Trend stories

  • Trump ‘angry’ about his attorneys’ performance as 2nd impeachment begins: Sources

  • No kitten around: the zoom filter turns the lawyer into a cat while listening to the video

The Bank of Canada does not have the legislative power of Parliament to offer digital currency, only to design, issue and distribute the bills wrapped in wallets and transmitted.


Click here to watch the video


2:11Bank of Canada for the valuation of digital currencies at the central banks of the world


Bank of Canada rates digital currencies with the world’s central banks – January 21, 2020

Since the first wave of COVID-19 almost a year ago, the central bank has been watching what Lane described as a growing reluctance to use cash in this country. Consumer surveys conducted by the central bank suggest that merchants prefer contactless payments, while other stores reject cash for fear of spreading viruses.

The story continues under the advertisement

Even in this increasingly digital economy, cryptocurrencies like Bitcoin “have no plausible claim to becoming the money of the future,” Lane said in his speech to the Montreal Institute for Data Valorization.

“The recent price hike seems to be less of a trend and more of a speculative mania – an atmosphere where a high-profile tweet is enough to trigger a sudden jump in prices.”

Continue reading:

Bitcoin hits a new record after Tesla’s investment of $ 1.5 billion

Lane said there is still a lot of regulatory work to be done before stablecoins, whose value is backed by secure assets, can be used in Canada or elsewhere.

Meanwhile, the central bank plans to make changes to the country’s electronic payments system in the summer of 2022, which will allow real-time payments to go beyond existing electronic transfers.

Lane said the “real-time rail system” could allow companies to pay part-time workers immediately after a shift or let homebuyers deposit digitally instead of physically taking a bank check to their attorney’s office.

He also said the system could allow governments to distribute emergency aid, which has flowed tens of billions during the pandemic, directly to citizens’ bank accounts within seconds.

Similarly, Lane said, the central bank is working to make it easier for people to send money overseas – a problem for many newcomers sending money to families in their country of origin or for snowbirds heading out for warm weather for the winter.

The story continues under the advertisement

With files from Global News

© 2021 The Canadian Press