It’s official, the Bank of Canada is analysing the possibility of issuing their own cryptocurrencies. In a paper released by the Office of the Superintendent of Financial Institutions, the Canadian Central Bank discusses whether a central bank should issue or not virtual currencies.
The abstract of the paper reads as follows:
“The emergence of digital currencies such as Bitcoin and the underlying blockchain and distribution ledger technology have attracted significant attention. (…) This paper addresses the question of whether a central bank should issue digital currency that could be used by the general public.”
The document was written by Walter Engert, who has worked for the Bank of Canada and the International Monetary fund, and by Ben S. C. Fung, that works for the Currency Department at the Bank of Canada.
The three topics that the authors focused on were payments for consumers, financial inclusion and financial stability. Cryptocurrencies could help to process payments faster and reduce costs between transactions. Different banks, like JP Morgan or Bank of America, are working with blockchain technology in order to be more efficient.
Neither the First nor the Last
The Central Bank of Canada is not the first bank thinking about issuing cryptocurrencies. Other countries have also taken several steps to create a national backed virtual currency. Russia has announced that it has the intention to create the CryptoRuble. This currency would work as the Ruble but it will not have a physical format.
So as to allow the CryptoRuble to expand in the country, the authorities have decided to take different measures. First it has opened two cryptocurrency agencies in Vladivostok, to give impulse to cryptocurrencies and educate people. Second, it is spreading in the country, the necessary technology to allow for the CryptoRuble adoption.
Estonia and Kazakhstan are also working in their own cryptocurrencies. Estonia faces a bigger problem, that it is the European Central Bank, who has already a clear posture on the matter. “No member state can introduce its own currency; the currency of the euro zone is the euro,” said the President of the European Central Bank, Mario Draghi at a meeting.