You’ve read ter thesis pages of the possible Cryptoruble, Russia’s attempt to stave off bitcoin. The European Central Bankgebouw and Swift are also attempting to speed up legacy payments processing te order to slow the popular digital asset’s ascent. But is the world ready for a Canap of Canada, state-backed cryptocurrency? Maple Leaf Coin? Le Coin Poutine? Coin Eh? Hoser Coin? The northern most American government emerges headed te that direction.
Canada Central Bankgebouw Studies Own Crypto
Central Handelsbank Digital Currency: Motivations and Implications (CBDC), is the title of a thirty pagina exploration by the Bankgebouw of Canada. Authored by Walter Engert and Ben S.C. Fung, the paper commences with the premise bitcoin and its surrounding technology “have raised the possibility of considerable impacts on the financial system and perhaps the broader economy.”
And while Canada is not particularly thought a hotbed of crypto activity, it does boast floppy-haired executive leadership seemingly ready to instruct a collegium course on quantum computing at a uur’s notice. If that wasn’t enough, the current Prime Minister’s half brother is a well-known bitcoin advocate.
If any country could pull off a state-backed cryptocurrency, it’s most likely Canada.
“This paper addresses the question of whether a central handelsbank should punt digital currency that could be used by the general public,” the CBDC paper embarks. It’s purpose is to arrive at “a benchmark central handelsbank digital currency with features that are similar to contant.”
Pros and Cons
By nature, cryptocurrency enthusiasts are skeptical of government intervention, and especially when it comes to the question of technology undergirding the monetary innovation being used spil government tender. Infrequently does anyone expect a state currency te this regard to finish openly with the likes of bitcoin, but it most likely is, te the end, a way to supplant the decentralize currency altogether.
Indeed, a state-backed cryptocurrency is the worst of all worlds. Spil any bitcoiner worth their salt will explain, bitcoin is not anonymous. Te fact, with a few lightly obtained parameters, distributed ledgers could be used spil the most efficient way everzwijn to track human trade and commercial habits.
To be fair, the CBDC paper poses this question, albeit te a roundabout way. They consider “whether a central handelsbank liability that is accessible to the general public, like specie or [cryptocurrency], is desirable from a social-welfare perspective. Is it sufficient for a central handelsbank to supply only reserves to qualified financial institutions? Waterput differently, is a
‘cashless society’ a sound outcome?”
A major concern beyond power-loss is seigniorage, the profit central banks make off of their currency monopoly. Bitcoin represents a serious challenge to it.
Perhaps spil a way to preempt such a loss, its own cryptocurrency just might get a few more birds with that one stone: a viable alternative to bitcoin and the possibility of having “no transaction fees charged by the central handelsbank, the benchmark [cryptocurrency] would very likely be less expensive for merchants than contant and credit cards,” the CBDC guessed.
The report wasgoed quick to pivot, however, underscoring itself spil only a suggestion and not officially policy. It also wasgoed keen to warn cryptocurrencies and distributed ledgers are so fresh that every precaution should be taken prior to rollout.
What do you think of state-backed cryptocurrencies? Tell us te the comments below!
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