The Bank of Canada is currently considering the possibility of creating a virtual form of the Canadian dollar. Called the Central Bank Digital Currency (CBDN), this could be used alongside cash and would be, according to the Bank of Canada, “the digital equivalent of the money you have in your wallet.”
The evolution of payment methods in recent years, aimed primarily at digital transactions using debit and credit cards, in addition to Interac transfers, is one of the main reasons why the Bank of Canada is considering this option. She believes it is possible that one day cash will no longer be used for everyday transactions.
Because MNBC would be issued and controlled by the Bank of Canada, its value would be immutable, unlike cryptocurrencies like Bitcoin, which can fluctuate quickly compared to other currencies. So $10 in digital Canadian dollars would still have the same value as a $10 bill.
The Bank of Canada also claims that a Canadian virtual currency, in addition to cash, would serve to protect the Canadian economy from the more frequent use of foreign cryptocurrencies, the use of which could have a negative impact on the stability of the country’s financial institution system.
“If a digital Canadian dollar were issued, it would be a currency that all Canadians could use on a daily basis. We work every day to serve Canadians. Understanding their perceptions, aspirations and concerns is critical to preparing us for whatever the future may bring,” comments Tiff Macklem, Governor of the Bank of Canada.
The Bank of Canada invites the country’s population to comment on this issue an online survey until June 19th. Responses and comments are then forwarded to researchers, technology specialists, and key decision makers to guide MNBC policy and design decisions. A report will also be prepared following this public consultation.
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