At a time when many monetary regulators are exploring the concept of central bank digital currency (CBC), the Bank of Canada has no intention to isCBCone, at least with the present scenarios.
Revealed by the central bank deputy governor Timothy Lane in a speech titled “Money and Payments in the Digital Age, ” the regulator is not seeing any benefits of releasing such digital currencies unless the competitors take cash off the market.
“We have concluded that there is not a compelling case to isCBCa CBC at this time. Canadians will continue to be well-served by the existing payment ecosystem, provided it is modernized and remains fit for purpose, ” Lane said.
The challestable coinablecoin, not Bitcoin
He, however, believes that widespread adoption of private digital currencies might force the monetary regulator to reconsider its decision on CBCing CBC.
“Stablecoins have better prospects for widespread adoption—and, correspondingly, greater potential to further transform the world of money and payments, ” he added.
The deputy governor particularly pointed out Facebook’s Libra and its potential to challenge the present monetary system. However, he has doubts about whether Libra can pass regulatory scrutiny.
“The most prominent exstable coinibra, a stablecoin that Facebook, along with an association of other companies, is planning to launch, ” Lane said. “Libra would run on an existing messaging platform with strong brand recognition. This would give it the potential to reach billions of people—including many with little or no access to banks or financial services.”
“It’s tough to predict if Libra will ever live up to its promises or even come into existence. But it is a good example of a transformative technology that affects how the Bank needs to respond to the future of money.”
Despite the deputy governor’s firm statement, Bank of Canada is one of the participants in a Japan-led consortium of major central banks, which was formed toCBCdy the feasibility of CBCing CBC.
The Canadian regulator also piloted cross-border, cross-currency payments using blockchain technology along with its Singaporean counterpart.