One of the country’s top central bankers says the Bank of Canada is going to start the work to build its own digital currency as a backstop should the day arise where cryptocurrency dethrone cash as king.
In a speech today in Montreal, deputy governor Timothy Lane says there isn’t a compelling case to issue a central bank-backed digital currency right now.
But the timeline to create one is long enough that the Bank of Canada is beginning work in the event cash is no longer used for most transactions.
Lane says such as situation could erode competition in the financial services sector and payment privacy, as well as exclude marginalized populations from fully participating in the economy.
He adds the bank could issue its own cryptocurrency if private digital currencies like Facebook’s proposed Libra become widely used in Canada and erode the central bank’s ability to manage monetary policy.
There are still several steps to go through before the Bank of Canada can issue a digital offering, including settling on the technology to use and getting the legal authority from Parliament to do so.
This report by The Canadian Press was first published Feb. 25, 2020.
The Canadian Press