MNI POLICY: Canada Govt. Welcomes BOC Digital Currency Work

By Greg Quinn

     OTTAWA (MNI) - Canada's finance department said the government supports the

central bank's new plan to prepare groundwork for a digital currency, saying it

will help the country respond if needed to changes in the marketplace.

     The Bank of Canada said Tuesday it is mapping out how to issue a digital

currency in case the decline of cash or new private forms of money shake up the

financial system. Deputy Governor Tim Lane said there are no plans to issue

digital currency and any move needs broad public support and legislative

changes. 

     "The Government of Canada welcomes the work by the Bank of Canada on

central bank digital currency," Marie-France Faucher, a spokeswoman with the

department, said by email on Wednesday. "This work includes important

collaboration with international and domestic partners, including the Department

of Finance." 

     "Given the complexity involved in the design and implementation of CBDC and

policy considerations, work on CBDC development will position Canada to be ready

to respond to market and technological developments if warranted," Faucher said.

     Lane's speech Tuesday and a 17-page discussion paper are the strongest

signal yet about how Canada may deal with the popularity of digital payments and

challenges to sovereignty from private alternatives like Facebook's Libra and

bitcoin. The Canadian dollar must remain as the dominant way to settle accounts

or policy makers' ability to guide the economy by changing interest rates or to

act as the lender of last resort will be undermined, the BOC said.

--MNI Ottawa Bureau; +1 613-314-9647; email: greg.quinn@marketnews.com

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