A digital currency sanctioned by the Bank of Canada would likely come in a basic format and rely on private sector innovation to add capabilities, the central bank official overseeing research into a potential digital Canadian dollar told a U.K. cryptocurrency conference on Tuesday.
BoC Deputy Governor Timothy Lane shared his thinking on central bank digital currencies (CBDCs) during a panel discussion at the FT Live Crypto and Digital Asset Summit held by the Financial Times. CBDCs are digital currencies issued by a central bank rather than commercial company and have been the subject of study around the world.
\u201cMost of those are not going to come from the basic design of the CBDC,\u201d he added. \u201cThey\u2019re going to come from the various other companies that are going to find ways of using it in their transactions.\u201d
While some have suggested borrowing and lending and real estate transactions as potential uses for smart contracts, Lane said it is difficult to predict what form such innovations could take and that central banks would not be the best place to develop them.
\u201cCentral banks\u2019 involvement might well be creating something that is basically digital fiat, but then it would be for the private sector to innovate and figure out ways of using it and incorporating it in smart contracts,\u201d Lane said, referring to the self-executing contracts that can facilitate direct peer-to-peer transactions on blockchain networks.
\u201cThe central bank would still be issuing the CBDC and it would still be a liability to the central bank, but all a lot of those uses and sort of how it would be brought to the public \u2026 would inevitably involve a high degree of private sector development and collaboration,\u201d he said.
During the event, Lane also emphasized the importance of privacy considerations when developing a digital dollar, and of maintaining public trust in the central bank.
\u201cAn absolutely key thing would have to be to make sure that (the CBDC) offers a degree of privacy which is acceptable to the public and so that it\u2019s not being used as a method of surveillance,\u201d Lane said. \u201cAnd the public can have the confidence that their transactions are not going to be used against them in some sense.\u201d
On exception would be transactions tied to criminal activity. He said the bank would still require a mechanism for tracking such uses in the digital space.
The Bank of Canada has been assessing the possibility of bringing a CBDC to market amid the rise in popularity of cryptocurrencies. Lane had previously raised concerns about the risk that private players could gain a significant foothold in the currency market, which led some industry experts to suggest the Bank might be forced to launch a digital currency to compete with private money.<\/p>\n","protected":false},"excerpt":{"rendered":"
A digital currency sanctioned by the Bank of Canada would likely come in a basic format and rely on private sector innovation to add capabilities, the central bank official overseeing research into a potential digital Canadian dollar told a U.K. cryptocurrency conference on Tuesday.BoC Deputy Governor Timothy Lane shared his thinking on central bank digital …<\/p>\n","protected":false},"author":13,"featured_media":61177,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[40,36],"tags":[6932,9565,8819],"class_list":["post-64483","post","type-post","status-publish","format-standard","has-post-thumbnail","","category-cryptocurrencies","category-market-updates","tag-boc","tag-digital-cad","tag-timothy-lane"],"_links":{"self":[{"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/posts\/64483","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/users\/13"}],"replies":[{"embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/comments?post=64483"}],"version-history":[{"count":2,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/posts\/64483\/revisions"}],"predecessor-version":[{"id":64487,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/posts\/64483\/revisions\/64487"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/media\/61177"}],"wp:attachment":[{"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/media?parent=64483"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/categories?post=64483"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/tags?post=64483"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}