Canadian dollar to remain at centre of financial system

The Bank of Canada is currently working on its own central bank digital currency that could be launched if a private digital tender were to take off as a payment system

The Canadian dollar will remain at the centre of the country's financial system, the central bank chief said on Monday, responding to questions about a Conservative leadership candidate's pledge to make the country the blockchain capital of the world.

There are promising benefits from innovation in the financial sector. Having said that, we certainly expect the Canadian dollar will remain at the centre of the Canadian financial system, Bank of Canada Governor Tiff Macklem said in testimony before a committee of the House of Commons.

The Bank of Canada is currently working on its own central bank digital currency, a so-called digital loonie, that could be launched if a private digital tender were to take off as a payment system.

Pierre Poilievre, a leading candidate for the leadership of the opposition Conservative Party, has said if elected he would back a ‘new, decentralized, bottom-up economy and allow people to take control of their money from bankers and politicians.’

He has posted videos of himself buying lunch with Bitcoin to make a point about its usability and regularly touts cryptocurrencies as a means for Canadians to ‘opt-out of inflation.’

Poilievre is leading in all polls ahead of a September vote to pick a new Conservative leader. Last month, Poilievre was favoured by 25% of Conservatives polled by the Angus Reid Institute, compared with 20% for Jean Charest, his closest contender.

The Bank of Canada has previously said cryptocurrencies like Bitcoin are speculative investments that do not have a plausible claim to become the money of the future.

The central bank has moved into the development stage on its digital currency, Senior Deputy Governor Carolyn Rogers told lawmakers on Monday, though the decision on whether that goes ahead or not is up to government.