The Bank of Canada is thinking about launching its own digital currency. The Logic was the first to report that the country’s central bank is investigating both opportunities and challenges focused on the project, with some believing that creating a public central bank digital currency (CBDC) could help tackle direct threats related to cryptocurrency.
A document titled “Central Bank Money: The Next Generation,” part of a two-year research project, was reportedly presented to the current Bank of Canada Governor Stephen Poloz in 2018. The document explained that one benefit to launching its own crypto would be the ability of collecting more information on its citizens, which could then be shared with police or tax authorities.
“We need to innovate to stay in the game. […] the CBDC would have all the benefits [of a central bank-backed asset,] and all the convenience and security of wireless, electronic payments,” Stephen Murchison, the author of the document, wrote at the time.
However, Josianne Ménard, the central bank’s spokesperson, told Cointelegraph that the bank had not made a decision about launching its own digital currency, saying, “Our work on CBDC is exploratory, given technological advancements and the important public service that bank notes provide to Canadians.”
Earlier this year, the Canadian government decided to ease up on some of its new anti-money laundering regulations, due to feedback from payment service providers and crypto exchanges. As a result, the exchanges will only have to report transfers of more than $10,000 CAD ($7,663 USD), and are now classified as money service businesses (MSBs).
MSBs will now include domestic and foreign businesses “dealing in virtual currency,” Canada’s government said. “As required of all MSBs, persons and entities dealing in virtual currencies would need to fulfill all obligations, including implementing a full compliance program, and registering with FINTRAC.”