Finance

Bank of Canada should issue a digital currency, think tank says – National

The C.D. Howe Institute thinks the Bank of Canada should issue a digital currency that can be converted into cash.

In a new report, the think tank says Canadian-dollar-linked stablecoins could become attractive if they are convertible into cash issued by the Bank of Canada and are well designed and well regulated.

A stablecoin is a cryptocurrency that is linked to an underlying asset such as a fiat currency.

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Why the COVID-19 pandemic highlights Canada’s need for a digital currency

It believes a Bank of Canada digital currency should be issued in token form, with decentralized technology for settling transactions.

It says bank-issued digital Canadian dollars could also encourage the private sector to introduce Canadian-dollar-linked stablecoins by enabling convertibility to take place digitally without having to rely on physical banknotes.

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The report’s authors add that stablecoin platforms could be given access to the Bank of Canada’s liquidity facilities and deposit insurance to mitigate the risk of runs.


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Canada looking to create digital consumer currency


Canada looking to create digital consumer currency – Feb 14, 2021

© 2021 The Canadian Press



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