The Canadian central bank has changed its stance against CBDCs.
The Bank of Canada has released a report detailing the various benefits of CBDC adoption, citing smart contract functionality as a huge boon.
Canada discovers CBDC benefits
In a staff report released Tuesday, the Bank of Canada laid out its positive views for the adoption of CBDC. The authors of the paper reported on several potential benefits, such as promoting competition in the financial sector and improving consumer choice. Additionally, the article explores various ways smart contract functionality can improve money management and states:
Smart contracts could enable programmable money. Money can be programmed to gain or lose value over time, or it can be programmed to be used only in transactions involving certain goods or services.
The bank also noted that with the addition of “programmable money”, dependence on costly third parties and intermediaries could be reduced or eliminated, which could streamline the financial system.
A CBDC can be useful and possibly necessary to ensure a competitive and vibrant digital economy.
While the report has a positive outlook on CBDCs, the paper’s authors considered two possible scenarios: If cash is no longer widely used in Canada, or if an alternative digital currency is so widely adopted, it could profoundly affect the country’s monetary sovereignty.
The Canadian central bank’s views on CBDCs so far have been mixed. The bank had previously denied the value of digital currencies after Sweden tried an e-krona.