The future of money is here

Canada should launch its own cryptocurrency

The world’s central bankers met last month for their annual economic symposium in Jackson Hole, Wyoming. In a speech at the event, Mark Carney, governor of the Bank of England, proposed the biggest change in the global financial system, perhaps since the 1944 Bretton Woods agreement. He argued that the U.S. dollar should no longer be the global reserve currency. Instead, he said, it should be a synthetic global currency backed by a basket of government-issued digital money.

Historically, the most powerful nation state in the world determined the global reserve currency. Before the U.S. dollar, it was the Pound Sterling. But this tradition also means that shocks to the standard currency spill over into global markets. Carney argues for a new “stablecoin,” which he says “would be best provided by the public sector, perhaps through a network of central bank digital currencies.”

In the High Church of Money any proposal to dislodge the U.S. dollar from it’s 75-year status is revolutionary bordering on heresy. Except in this case, Carney is not an iconoclastic outsider but an insider who believes governments and institutions should help shape our economic future rather than simply react to events.

Canada should lead the way by launching our own cryptocurrency.

Bank of England research suggests that replacing a portion of payments with a digital currency could boost GDP by three per cent, lower barriers to financial inclusion and empower consumers. This would be a great tonic in and of itself. Becoming the first G20 country to launch a truly native digital currency would also mean setting the standard for others to follow, giving Canada a competitive edge in the emerging fintech sector. It would signal, too, that we are willing to tackle one of the most important governance questions of the so-called second digital age: What is the future of money?

To wit, in his Jackson Hole speech, Carney said, “The Bank of England and other regulators have been clear that unlike in social media, for which standards and regulations are only now being developed after the technologies have been adopted by billions of users, the terms of engagement for any new systemic private payments system must be in force well in advance of any launch.”