Canadian Central Bank Published a 30-page exploration report titled Central Bank Digital Currency: Motivations and Implications (CBDC) Authored by Walter Engert and Ben S.C. Fung. The paper starts with the assumption bitcoin and its surrounding technologies “have increased the possibility of significant influences on the fiscal system and possibly the wider market.”
And while Canada isn’t especially believed a hotbed of crypto action, it will boast floppy-haired executive direction apparently prepared to educate a college class on quantum computing in a minute’s notice. If this was not enough, the recent Prime Minister’s half-brother is a famous bitcoin urge.
If any nation could pull off a state-backed cryptocurrency, it is likely Canada.
“This paper addresses the question of whether a central bank must issue digital currency which might be used by people,” that the CBDC newspaper begins. It’s objective is to arrive at “a standard central bank electronic money with attributes which are like cash.”
Pros and Cons
By character, cryptocurrency fans are skeptical about government intervention, and particularly when it concerns the question of technologies undergirding the financial invention being utilized as authorities tender. Rarely does anybody expect a country money in this respect to complete publicly using the likes of bitcoin, but it likely is, in the long run, a means to supplant the decentralize money entirely.
As any bitcoiner worth their salt will describe, bitcoin isn’t anonymous. In actuality, with some readily obtained parameters, dispersed ledgers can be utilized as the most effective way ever to monitor human trade and industrial customs.
To be honest, the CBDC paper presents this question, albeit in a roundabout manner. They consider “if a central bank accountability that’s available to the general public, such as cash or [cryptocurrency], is desired from a social-welfare standpoint. Is it enough for a central bank to provide only reservations to qualified financial institutions? Put otherwise, is a
‘cashless society’ a solid outcome?”
A major concern beyond power-loss is seigniorage, the profit central banks make from the currency monopoly. Bitcoin represents a critical challenge for this.
Perhaps as a means to preempt such a loss, its own cryptocurrency just might find a few more birds with that one stone: a viable solution to bitcoin and the possibility of having “no transaction fees charged by the central bank, the benchmark [cryptocurrency] would probably be cheaper for merchants than cash and credit cards,” the CBDC suspected.
The report was quick to rally, nevertheless, underscoring itself as only a proposal and not official policy. It also was eager to warn cryptocurrencies and dispersed ledgers are so fresh that each precaution ought to be taken before rollout.