While a digital national currency does have the potential to mitigate key financial issues, we cannot ignore the democratic risks such a currency could introduce without safeguards.
One missed opportunity is that the digital dollar doesn’t seem to circumvent the need for a private bank account. We currently have to have those in order to participate in the payment processing system that the private banks partially underpin. In a digital dollar system, there isn’t a fundamental need for the private banks to act as intermediaries between Canadians and the BoC. If the digital dollar allowed this, then the private banks would have to offer additional value for depositing money with them, besides access to the payment processing system. Alas, last time I checked, that wasn’t the case. It is a Canadian tradition to not endanger the revenue streams of our big corporate darlings. Which isn’t totally lost on me, given how many people they employ. 🤷
First I heard too, I found this from the Bank of Canada.
tl;dr Its not crypto and they don’t have immediate plans to implement it, but they’re exploring the idea and just completed a public consultation on it.
What is a digital Canadian dollar?
Simply put, a digital Canadian dollar would be a digital form of the cash in your wallet. Like cash, it could buy the things you need. But the advantage is that you could also use it for online purchases and to transfer money between family and friends. And businesses could use it to pay each other.
Digital form of cash in your wallet? Like a debit card linked checking account or a prepaid credit card (i.e. Koho)? Everything described seems to be exactly what we can already do since forever. LOL
It looks the same on the surface, however underneath the existing system has a lot of layers that were created over the history of the banking system that don’t need to exist in a digital ledger system like this.
I think the difference is you could use it somehow outside of a bank account, like with just a digital wallet? I’m no economist, but I don’t see any tangible benefits to this either. Having a frictionless alternative to etransfers would be nice I guess, but not worth making major changes to our monetary structure.
From the sounds of it your digital cash would need to be stored in a bank account or anything like that, so banks won’t have access to your money to invest in other things that make the bank money and potentially lose it all.
Wouldn’t that mean there would be added fees, no insurance for loss, etc.?
Whatever it ends up being, they really need to make a very clear definition of what exactly this is, and how it differs from traditional banking.
There’s no way the majority of the population, especially first generation immigrants to this country, would understand what the hell a “digital Canadian dollar” is.
I see a lot of opportunities for abusing people’s naivety on this one.
The article cites some very good points, The government could indeed control how your money gets spent and they could and would effectively shut you down as a functioning member of society if you got on their bad side. Let’s be clear I am not saying that only the liberals would do this,I’m sure the Conservatives or the NDP wouldn’t roll this back if they came to power and they had the ability to control your pocket book. No politician gives back a new power when they get it, despite any special situation requiring the power ending. No, the liberals wouldn’t be the only party to use such an ability, but they are the party the had the trial run. As for the “need” namely mitigating two potential future threats of the mass adoption of external currencies and the next financial crisis. Precisely how easy is it to walk into a store and pay for your milk in bitcoin, or to pay your electricity bill with Yuan…the answer is you can’t so that first argument is basically smoke and mirrors. As for mitigating a financial crisis…if the same people who control our current fiat currency also control any potential digital currency…l am unclear as to this mechanism of mitigation will work. Cash is king but cash is also anonymous meaning you can spend it on what you like or give it to anyone you want…and the government gets no say. With digital currency that all goes away.
well, with all the people complaining about the money laundering, tax evasion cash deals etc, going digital means it’s all verifiable.(part of why China is also considering cause their corrupted finds way to move money out despite of strict regulations.)
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One missed opportunity is that the digital dollar doesn’t seem to circumvent the need for a private bank account. We currently have to have those in order to participate in the payment processing system that the private banks partially underpin. In a digital dollar system, there isn’t a fundamental need for the private banks to act as intermediaries between Canadians and the BoC. If the digital dollar allowed this, then the private banks would have to offer additional value for depositing money with them, besides access to the payment processing system. Alas, last time I checked, that wasn’t the case. It is a Canadian tradition to not endanger the revenue streams of our big corporate darlings. Which isn’t totally lost on me, given how many people they employ. 🤷
This is the first I’ve heard of plans for a digital currency in Canada. Do you have a link?
This is the link OP provided
First I heard too, I found this from the Bank of Canada.
tl;dr Its not crypto and they don’t have immediate plans to implement it, but they’re exploring the idea and just completed a public consultation on it.
Digital form of cash in your wallet? Like a debit card linked checking account or a prepaid credit card (i.e. Koho)? Everything described seems to be exactly what we can already do since forever. LOL
It looks the same on the surface, however underneath the existing system has a lot of layers that were created over the history of the banking system that don’t need to exist in a digital ledger system like this.
Yeah; this would replace the onion that is EMV with a straightforward digital ledger standard backed by the Bank of Canada.
Under such a system, physical cash could become NFTs of the digital equivalent (and not NFTs in the cryptobro sense).
This could make currency management much less expensive.
I think the difference is you could use it somehow outside of a bank account, like with just a digital wallet? I’m no economist, but I don’t see any tangible benefits to this either. Having a frictionless alternative to etransfers would be nice I guess, but not worth making major changes to our monetary structure.
From the sounds of it your digital cash would need to be stored in a bank account or anything like that, so banks won’t have access to your money to invest in other things that make the bank money and potentially lose it all.
Wouldn’t that mean there would be added fees, no insurance for loss, etc.?
Whatever it ends up being, they really need to make a very clear definition of what exactly this is, and how it differs from traditional banking.
There’s no way the majority of the population, especially first generation immigrants to this country, would understand what the hell a “digital Canadian dollar” is.
I see a lot of opportunities for abusing people’s naivety on this one.
The article cites some very good points, The government could indeed control how your money gets spent and they could and would effectively shut you down as a functioning member of society if you got on their bad side. Let’s be clear I am not saying that only the liberals would do this,I’m sure the Conservatives or the NDP wouldn’t roll this back if they came to power and they had the ability to control your pocket book. No politician gives back a new power when they get it, despite any special situation requiring the power ending. No, the liberals wouldn’t be the only party to use such an ability, but they are the party the had the trial run. As for the “need” namely mitigating two potential future threats of the mass adoption of external currencies and the next financial crisis. Precisely how easy is it to walk into a store and pay for your milk in bitcoin, or to pay your electricity bill with Yuan…the answer is you can’t so that first argument is basically smoke and mirrors. As for mitigating a financial crisis…if the same people who control our current fiat currency also control any potential digital currency…l am unclear as to this mechanism of mitigation will work. Cash is king but cash is also anonymous meaning you can spend it on what you like or give it to anyone you want…and the government gets no say. With digital currency that all goes away.
well, with all the people complaining about the money laundering, tax evasion cash deals etc, going digital means it’s all verifiable.(part of why China is also considering cause their corrupted finds way to move money out despite of strict regulations.)