The Office of the Superintendent of Financial Institutions of the Bank of Canada has published a report on the pros and cons of the Canadian central bank. currencies. This currency would be called "Central Bank Digital Currency" (CBDC)

The research report was prepared by two senior researchers – Walter Engert, Senior Director, Research – Office of the Superintendent of Financial Institutions Canada, and Ben SC Fung, Director of Economic Research and Analysis at the Currency Department of the Bank of Canada. Their main role is to lead the department's economic research program.

Engert and Fug also advise the department on issues related to the evolution of retail payments and their implications for liquidity demand. This is important because even though the authors have noted that the report is their opinion alone, and not necessarily the bank's position, their opinion has weight.

Part of the report reads:

"Is it sufficient for a central bank to provide only reserves to qualified financial institutions? "cashless society" a healthy issue? "

Other Highlights of the Report

Based on this paper, there are six possible benefits that a central bank can derive from the issuance of a tax credit. a virtual currency. The authors focused primarily on three benefits: payments to consumers, financial inclusion and financial stability. In their view, the CBDCs would reduce friction for online payments and encourage small merchants to provide services over the Internet. Cryptocurrencies supported by the central bank could also reduce the costs of retail payments, according to the report.

The authors argued that financial inclusion could greatly benefit the economies of developing countries, but would have limited impact in advanced economies such as Canada.

"Financial inclusion is not a compelling reason for the CBDCs in most advanced economies, including Canada."

For the guarantee financial stability, the authors state that the CBDCs can provide consumers with a secure way to retain value without facing the risks faced by advanced financial systems like Canada.