The Bank of Canada, the country’s central bank, has been researching the possible issuance of digital currency, according to an internal presentation. The presentation was presented to Stephen Poloz, Governor of the Bank of Canada, as well as the board of directors of the central bank, as a two-year research project on whether the bank should issue its own digital currency.
According to the presentation, the digital currency issued by the central bank will offer all the benefits of assets secured by the central bank and all the convenience and security of wireless electronic payments.
“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.” - Poloz noted.
The presentation implies two use cases of the new digital currency token-based and account-based. The main concern is the fact that traditional money is becoming obsolete, and “banknotes would become too costly for merchants to accept as a payment method.”
Also, the digital currency can also enable the authorities in the collection of information. As per the presentation, while not sharing personal information with the payee, it could be shared with law enforcing agencies or the tax authorities.