Bank Of Canada Considers Its Own Digital Currency; An Easy Way To Track Spending Habits
The Bank of Canada is among the regulatory authorities around the world looking to launch their own digital currency. A recent internal report presented to its Governor, Stephen Poloz, highlighted some benefits that could come with this innovation.
According to the research, the digital currency wave is likely to actualize to new currencies in the future. The regulator, therefore, finds itself in a position that a reaction to the current FinTech developments is inevitable. One of the key points supporting the idea of a digital currency is the transparency in data sharing that would be leveraged from tokenized information on spending habits.
In addition, the Bank of Canada might as well approach the challenge posed by cryptocurrencies in regulating money through the creation of an asset it backs. This would enable the Bank to not only deliver convenient and secure means of digital transactions but also maintain its influence as the Monetary Policy watchdog.
Research on the topics of Blockchain and Cryptocurrency have been part of the Bank’s strategy since 2013. A notable milestone so far was the transfer of digital currency from the Bank of Canada to Singapore’s regulator. The presentation to Poloz suggests two approaches that could be used in integrating a digital currency; account-based and token-based.
The Brighter Side!
Canada has in the past decade experienced a rise in the number of crypto users within its Financial Ecosystem. Current figures suggest that 5% of the population hold an amount of Bitcoin, this is close to a 70% rise from the statistics in 2018. The world is also at a point where discussions on digital money are being looked at keenly especially with the wake of Libra and China’s digital currency that is almost at its completion phase. Furthermore, the World Bank and IMF meetings this week are set to highlight issues around digital currencies and blockchain.