Canada Launches CBDC Consultation To Look At Positive Potentials Versus Cash
Key Points:
- The Bank of Canada has launched a public consultation on a prospective CBDC.
- In response to the fall in actual currency transactions, the central bank has been experimenting with the notion for many years.
- The federal government, not the central bank, makes the decision on whether to establish a CBDC.
The Bank of Canada launched a public consultation on a prospective central bank digital currency (CBDC), or digital Canadian dollar, on Monday. The CBDC consultation period will end on June 19.
Participants will be able to voice their opinions on the attributes of the Canadian digital currency via the consultation website.
Although the central bank does not consider that a retail CBDC is now required, Senior Deputy Governor Carolyn Rogers stated:
“As Canada’s central bank, we want to make sure everyone can always take part in our country’s economy. That means being ready for whatever the future holds.”
Although the fall of cash has accelerated in certain areas owing to the COVID-19 epidemic, central banks throughout the globe are researching digital versions of their currencies in order to avoid leaving digital payments to the private sector.
China has been a forerunner in the development of CBDC, however, adoption is still in its early phases. Japan’s, Brazil’s, and Australia’s central banks have also made moves toward establishing a digital token.
US policymakers are split, with Federal Reserve Governor Christopher Waller among the naysayers.
The other is about preserving monetary autonomy. Being a neighbor to the US, there is a possibility that it will be dollarized, whether through a CBDC or a US dollar stablecoin. While the United States was not specifically stated, the risk of a cryptocurrency or foreign CBDC being extensively utilized inside Canada, perhaps affecting its financial stability, was raised. This has been a source of worry for some time.
The federal government, not the Bank of Canada, makes the choice on whether to introduce a CBDC. Nonetheless, the Fed has been setting the foundation in case Canada approves the plan.
The concept of CBDCs is not without debate. Several commercial banks are concerned that the option to hold digital money directly at the central bank may reduce the value of commercial bank deposits. Last year, the Canadian Bankers Association issued a warning regarding CBDCs, claiming that they may undercut commercial bank financing and reduce financial system competitiveness.
DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your research before investing.
Join us to keep track of news: https://linktr.ee/coincu
Harold
Coincu News
Author
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Canada Launches CBDC Consultation To Look At Positive Potentials Versus Cash
Key Points:
- The Bank of Canada has launched a public consultation on a prospective CBDC.
- In response to the fall in actual currency transactions, the central bank has been experimenting with the notion for many years.
- The federal government, not the central bank, makes the decision on whether to establish a CBDC.
The Bank of Canada launched a public consultation on a prospective central bank digital currency (CBDC), or digital Canadian dollar, on Monday. The CBDC consultation period will end on June 19.
Participants will be able to voice their opinions on the attributes of the Canadian digital currency via the consultation website.
Although the central bank does not consider that a retail CBDC is now required, Senior Deputy Governor Carolyn Rogers stated:
“As Canada’s central bank, we want to make sure everyone can always take part in our country’s economy. That means being ready for whatever the future holds.”
Although the fall of cash has accelerated in certain areas owing to the COVID-19 epidemic, central banks throughout the globe are researching digital versions of their currencies in order to avoid leaving digital payments to the private sector.
China has been a forerunner in the development of CBDC, however, adoption is still in its early phases. Japan’s, Brazil’s, and Australia’s central banks have also made moves toward establishing a digital token.
US policymakers are split, with Federal Reserve Governor Christopher Waller among the naysayers.
The other is about preserving monetary autonomy. Being a neighbor to the US, there is a possibility that it will be dollarized, whether through a CBDC or a US dollar stablecoin. While the United States was not specifically stated, the risk of a cryptocurrency or foreign CBDC being extensively utilized inside Canada, perhaps affecting its financial stability, was raised. This has been a source of worry for some time.
The federal government, not the Bank of Canada, makes the choice on whether to introduce a CBDC. Nonetheless, the Fed has been setting the foundation in case Canada approves the plan.
The concept of CBDCs is not without debate. Several commercial banks are concerned that the option to hold digital money directly at the central bank may reduce the value of commercial bank deposits. Last year, the Canadian Bankers Association issued a warning regarding CBDCs, claiming that they may undercut commercial bank financing and reduce financial system competitiveness.
DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your research before investing.
Join us to keep track of news: https://linktr.ee/coincu
Harold
Coincu News
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