In 2019 there aren’t any governments or banks that haven’t researched about cryptocurrencies. This technology is so fascinating that everyone wants to utilize it for their own benefit. The idea of a national cryptocurrency is not science fiction anymore, in fact, Venezuela has already shifted to cryptocurrencies to battle hyperinflation, China is also prepared to launch their own national cryptocurrency alongside some other nations.
The USA doesn’t want to be left behind and is eyeing uo the digital dollar. Earlier this month, the Financial Services Committee recently asked the Federal Reserve if there are any plans to launch a digital currency. The need to digitize money is quite imminent as U.S. Representatives French Hill, and Bill Foster states mentioned in their letter to Federal Reserve Board Chairman Jerome Powell, “the nature of money is changing.”
The situation, however, might soon be changing as a recent report by The Logic states that The Central Bank of Canada is considering launching a sovereign digital currency work as a replacement for cash while also fighting the “direct threat” cryptocurrencies pose to monetary control. The notion is somewhat similar to that of what the People’s Bank of China (PBOC) proposed, which said that the Bank was looking to launch a state-backed cryptocurrency to better track the transactions of its 1.3+ billion citizens and also have a stronger grip on the nations monetary policies.
According to a presentation titled “Central Bank Money: The Next Generation” acquired by The Logic, the presentation was prepared by Stephen Murchison, who is an advisor to Governor Stephen Poloz and also the one tasked with leading the bank’s digital currency research. The presentation was made as a part of a two-year research project that decides whether the bank should issue its own digital currency or not. A part of the presentation reads:
“We need to innovate to stay in the game,” A digital currency would provide “all the benefits” of a central bank-backed asset, it says, as well as “all the convenience and security of wireless, electronic payments.”
Louise Egan, a spokesperson said that the bank is yet to decide whether they want to launch a digital currency. The Bank of Canada has been researching digital currencies since 2013, a part of their presentation even mentioned that cryptocurrencies could become a “direct threat” to its “ability to implement monetary policy and lender of last resort (LOLR) role.”
The Bank of Canada also noted that its digital currency would be more traceable than cash, allowing police and tax authorities to have access to Canadians’ transaction records. When about this, Egan said this is “among the many issues that continue to be assessed by Bank researchers.”
Canada is now one of the many nations that are exploring digital currencies as a replacement for cash. Quite recently, Switzerland’s central bank also started exploring the uses of cryptocurrencies for trading. It’s only a matter of time now before we see cryptocurrencies slowly making its way into our daily lives.