Does Canada really need a digital loonie?
CBC
The Bank of Canada is wading into the fraught and controversial world of digital currencies, launching public consultations this week into how Canadians might use a digital dollar.
"We've been researching a digital dollar for quite a while now," said Carolyn Rogers, the senior deputy governor of the central bank. "And we're at a point where we need help from Canadians, we need to understand what Canadians want."
And yet the bank maintains there is neither a need nor a plan to launch a digital loonie.
So, why bother with the public consultations at all?
Rogers says more transactions are being done digitally. Only about 20 per cent of retail transactions are done in cash. And, she says, there's been a surge in interest in various digital currencies.
When most people think of a digital dollar, they first think of cryptocurrencies like bitcoin or Ethereum. What the bank is looking at is not quite crypto, but it's not quite what we generally think of as cash either.
"The bottom line is a digital dollar [that's] backed by the Bank of Canada," Rogers told CBC News.
Such so-called central bank digital currencies have gained traction around the world. Dozens of central banks are researching or launching public consultations.
In a statement when its public consultations began, the Bank of Canada reiterated that any decision to create a digital currency would be made by politicians, not central bankers.
"At this time, a digital Canadian dollar is not needed. And any decision to issue one rests with Parliament and the Government of Canada," wrote the bank in a statement.
But if Parliament decided it wants a digital currency, the bank would be responsible for issuing one. In that case, Rogers says, policy-makers should make sure a safe and reliable currency is made available.
"If Canadians wanted a digital form of currency, and they didn't have one available from the Bank of Canada, they might start to use some of those private currencies," like bitcoin. Those currencies sometimes face wild fluctuations, among other complications.
"So we want to make sure that they have an alternative that is as secure as the cash in their wallet. But digital," Rogers told CBC News.
But the announcement is being met with a certain level of skepticism.
