Bank of Canada Gets More Serious about Issuing a Digital Currency
Nov 30, 2017
In November 2017, the Bank of Canada released a white paper that addresses the question of whether a central bank should issue digital currency that could be used by the general public.
The emergence of digital currencies such as Bitcoin and the underlying blockchain and distribution ledger technology have attracted significant attention. These developments have raised the possibility of considerable impacts on the financial system and perhaps the wider economy.
This paper begins by discussing the possible motivations for a central bank to issue a digital currency. The paper then sets out a benchmark central bank digital currency (CBDC) with features that are similar to cash. The implications of such a digital currency are explored, focusing on central bank seigniorage, monetary policy, the banking system and financial stability, and payments. Finally, a CBDC that differs from the benchmark digital currency in a significant way is considered.
Review the press release and white paper on the Bank of Canada's website.
