Bank of Canada deputy governor Timothy Lane recently confirmed that the bank is currently exploring “key questions” related to the potential issuance of a central bank digital currency, according to a report from Toronto news outlet CP24. He reportedly made the comments during a University of Calgary speech.
Lane suggested, however, that the bank would need to mitigate risks before it could ever consider the issuance of a national digital currency. He cited several areas of concern that would need to be addressed, including cryptocurrency’s potential use for criminal activities and its possible negative impact on financial intermediaries like the banking industry.
Lane also explained why the bank refers to digital currencies as assets rather than currencies. As CP24 reports,
Lane says the central bank uses the term cryptoassets to describe cryptocurrencies because they do not do a good job of performing the basic functions of money.
However, he says, as they evolve they may touch on the central bank's core functions including monetary policy, financial stability, payments and currency.