CD Howe Institute Believes Bank of Canada Should Issue Cryptocurrency

The CD Howe Institute believes that a Bank of Canada digital currency should be issued in the form of a token. (Photo: The Canadian Press)

–

Ottawa – The CD Howe Institute believes the Bank of Canada should issue a digital currency that can be converted to cash.

In a new report released Thursday, the research group says stable cryptocurrencies linked to the Canadian dollar could become attractive if they were convertible to cash issued by the Bank of Canada and were well designed and well regulated.

A stable cryptocurrency is a virtual currency linked to an underlying asset such as fiat currency.

The CD Howe Institute believes that a Bank of Canada digital currency should be issued in token form, with decentralized technology for settlement of transactions.

He points out that digital Canadian dollars issued by banks could also encourage the private sector to introduce stable cryptocurrencies linked to the Canadian dollar by allowing their conversion to take place digitally, without having to rely on physical banknotes.

The report’s authors add that stable cryptocurrency platforms could have access to liquidity facilities and deposit insurance from the Bank of Canada to mitigate the risk of a rush.

–
–

–

–

– .