Is Canada Working on a Canadian Central Bank Digital Currency?

Canadian central bank digital currency

Canada considers considers introducing a Canadian central bank digital currency, claims the Senior Business Editor at 680 News Mike Eppel. During an interview, Eppel stated that various concerns are surrounding the cryptocurrency sector, including volatility and inadequate regulatory frameworks. The Bank of Canada officials therefore consider to utilize the new technology and introduce a Canadian central bank digital currency to revolutionize the way in which financial institutions process transactions.

Eppel stated: ‘The Bank of Canada wants to get ahead of the curve. They have this internal memo saying, yeah, eventually, they’re likely to launch some sort of crypto.’ According to the senior editor, the decision to develop a Canadian central bank digital currency is due to the lack of crypto regulations, an area in which the Bank of Canada would like to have influence. However, Eppel believes that the downside of this sort of adoption is that banks could use the new blockchain technology to track all of our transactions.

Although this method of adopting blockchain technology and cryptocurrencies has not been used yet, Canada’s central bank likely already plans to introduce a Canadian ‘Central Bank Digital Currency’ (CBDC), one of the most regulated forms of the disruptive new digital asset class.

CBDCs are developed by a number of countries, with China possibly being the first one to launch a national cryptocurrency by the end of this year, as rumored by some insiders. As for their rival, the Philadelphia Federal Reserve bank president Patrick Harker recently stated that the US will inevitably introduce a dollar CBDC in the near future as well.

An institutional tool to shut down crypto?

If financial institutions were to develop CBDCs, they could certainly pressure the sector and go as far as to shut down public blockchain networks such as Bitcoin. Last year, world-renowned economist Nouriel Roubini stated that banks could put a stop to cryptocurrencies by launching their own.

‘If a CBDC were to be issued, it would immediately displace cryptocurrencies, which are not scalable, cheap, secure, or actually decentralized’ said Roubini. Discussing the benefit of privacy by adopting non-bank cryptocurrencies, the economist stated that assets such as Bitcoin are not truly anonymous given the fact that everyone leaves a digital footprint by conducting a transaction.

Moreover, Roubini said that governments could attempt to put a complete stop to privacy-oriented projects in order to prevent criminals and terrorists from using crypto. Completely accurate in his predictions, several privacy coins have already been delisted on some exchanges such as OKEx.

If cryptocurrencies are to reach global adoption, they will need to solve several scalability issues that prevent them from being used for more than just speculative investments. While crypto enthusiasts will stick to the original idea of decentralization and continue support projects such as Bitcoin and Ethereum, the rest of the world might adopt CBDCs if banks seriously consider becoming a part of the sector.

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