The Bank of Canada has found that the adoption of a central bank digital currency (CBDC) could be beneficial and “probably necessary” to boost the country’s economy moving forward.
- The Bank of Canada staff paper noted several benefits of the CBDC such as the possibility of programming the currency to either gain or lose value over time, or limit their use for specific goods and services.
- The paper noted that a CBDC will also reduce costs on reliance on third parties and intermediaries as the financial system would be streamlined. It would also increase welfare, reduce losses, and push for digital innovation.
- The paper took an optimistic outlook on CBDC, noting that they could post benefits and would be probably necessary to ensure that the economy remains competitive and vibrant.
- CBDCs would be net positive if cash was no longer widely used, or if the digital currency was widely adopted that it would endanger the monetary sovereignty of the country.
Prior to the paper released Tuesday, the Bank of Canada has aired mixed views on CBDCs.
Source: Crypto Briefing