Revealed today, the central bank of Canada is looking into the likelihood of launching its own sovereign cryptocurrency that would eventually replace cash and fight the so-called ‘threat’ that digital currencies pose to governmental entities and monetary controls.
Canada is joining the many nations that have announced their plans to launch a sovereign cryptocurrency, just as mainstream adoption seems to be making ground.
The Bank of Canada has actually been researching digital currencies in 2013 and in its latest presentation said that digital currencies could become a ‘direct threat’ to “ability to implement monetary policy and lender of last resort (LOLR) role.”
According to a report from The Logic, the plan is very similar to that of the People’s Bank of China (PBOC), who announced a few months ago that it is getting ready to release a state-backed-cryptocurrency. This is being done in a bid to further track the transactions of its over 1.3 billion population as well as solidify its grip on its monetary policy, not to mention fighting off the use of cryptocurrency.
Central banks have been stressing the importance of maintaining their control over the money in discussing their plans for cryptocurrency. In fact, a few weeks ago, the UK’s Financial Conduct Authority revealed that it would be enforcing AML regulations for crypto platforms like Coinbase, ATM’s and open-source applications like wallets. This is quite a dramatic move, to say the least, and it would definitely bring in banking-style controls to digital currency to the country.
The Canadian bank has highlighted that its prospective cryptocurrency would be a lot more traceable than cash which would, therefore, allow police and tax authorities to have access to Canadians’ transactions records.
It will be interesting to see how this situation plays out. For more news on this and other crypto updates, keep it with CryptoDaily!