Cryptomoney ‘very far off,’ BoC says
Plays down research into blockchain tech
Bank of Canada senior deputy governor Carolyn Wilkins is pouring cold water on rumours that the central bank is developing its own cryptocurrency.
In a speech in Calgary Friday, Wilkins reiterated that the digital currency CAD- Coin t he Bank of Canada said it was experimenting with Thursday is only a prototype for how large transactions between banks might be settled in the future. Anyone looking forward to the central bank issuing a digital currency for public use like Bitcoin or Ether should be prepared to wait a long time, she said.
“I think we’re very far off,” she said.
“Our priority is to see up- grades made to the core payment systems that the financial system relies on and that the Bank oversees.”
On Thursday, a person attending a panel discussion at Calgary’s Payments Panorama conference tweeted a slide from a presentation on a Bank of Canada experiment.
The slide revealed the Bank of Canada was exploring how distributed ledger technology could be used to make payment settlement between banks more efficient and secure.
Distributed ledger technology, also known as blockc hain, l i nks c omputers together to create a tamperresistant record. It allows parties that don’t entirely trust each other, such as competing banks, to conduct secure transactions without an intermediary making sure everything is on the level.
To conduct the experiment, t he Bank of Canada created CAD- Coin, a medium of exchange that served as a sort of receipt of transactions within the system. Similar to trading real dollars for poker chips and exchanging them back into dollars at the end of the night, CAD- Coin has no value outside the settlement system.
“Because it cannot be used anywhere else, it is a different animal altogether from a digital currency for widespread use,” Wilkins said.
Despite the Bank of Canada’s statements clarifying it was just an experiment and never i ntended f or public use, headlines about Canada’s new “digital fiat currency” appeared in publications around the world Thursday and Friday.
Jan Pilbauer, chief i nformation officer for Payments Canada, said t he experimental settlement system was powered by the distributed ledger software Ethereum. R3, a consortium of financial institutions exploring potential uses of blockchain technology, was responsible for coding the distributed ledger, he said.
S o me might be di s - appointed that they won’t be able to buy a bag of chips with a CAD- Coin any time soon, but Pilbauer said he’s enjoying the attention the topic is getting.
“People are interested in payments, which doesn’t happen every day,” he said. “Payments are making headlines. I’m excited.”