Canada’s central bank, the Bank of Canada, and five other Canadian banks (like a growing number of banks around the world) are experimenting with blockchain technology and a possible digital dollar as the growing demand for digital fintech payment systems puts the squeeze on the traditional banking sector.
At a recent IMF/World Bank conference hosted by the U.S. Federal Reserve, an estimated 90 central banks, including the Bank of Canada, came forward to talk about their research into and experiments with distributed ledger technology (DLT), the blockchain and digital currencies.
The big Canadian banks are also members of the R3 Consortium, which is working with 50 member banks worldwide, developing a foolproof methodology and standard for blockchain technologies for banks.
The Bank of Canada is cautious in commenting on its digital money experiments but is adamant that this is just an experiment and nothing more.
Martin Bégin, a representative speaking for the Bank of Canada, told Bitcoin Magazine :
“What was referred to as CAD-coin is just a means of representing settlement balances on the distributed ledger, like a deposit receipt. It could also be called ‘deposit-coin’ or ‘settlement-coin.’ It doesn’t exist as a medium of exchange outside the experimental wholesale payment system. Our only goal at this stage is to understand the mechanics, limits and possibilities of this technology.”
Bégin said that the Bank of Canada chose to experiment with Ethereum because the members were the most familiar and experienced with coding on that platform.
“This particular project is one part of a larger Bank of Canada work plan to investigate the distributed ledger technology and better understand its characteristics,” he said. “We may look at other platforms going forward.”According to Bégin, the greater potential for DTL lies beyond the Bitcoin blockchain, in applications outside of digital currencies.“Fintech is an important part of the Bank’s […]
