Bank of Canada Deputy Governor Timothy Lane said the bank does not currently need to emit its digital currency.
The Bank of Canada, the country’s main monetary policy entity, says its central bank digital currency (CBDC) will be more eco-friendly than Bitcoin, but it does not appear to be in a rush to issue one anytime soon.
According to a report by Penticton Western News, Canada’s central bank has been analyzing environmental impacts as part of its research for the creation of a digital dollar. The media cited recent statements by the entity’s deputy governor, Timothy Lane.
During a talk with the Canadian Chamber of Commerce, Lane argued that while high power consumption is an integral part of Bitcoin’s mechanism and people’s trust for its value, his CBDC would not need a similar resource to build trust. Lane also said this is because Canadians are very confident regarding the Bank of Canada and the banknotes it prints.
Canada’s CBDC Will be Eco-friendly, and Green
Lane’s remarks come shortly after Elon Musk suspended Bitcoin payments for his company, Tesla, due to concerns over the use of fossil fuels. The announcement made a big impact on the digital asset market while also fueling discussions around the high energy consumption of Bitcoin and other cryptocurrencies.
Most recently, the billionaire convinced Bitcoin miners to create a Council that promotes the use of renewable energy within the industry.
For Lane, the fact that the Canadian digital dollar focuses on a system based on the prior trust of citizens gives the future currency a higher environmental value than Bitcoin. That means that there is no need to rely on those very environmentally wasteful mining technology ways that users have been experimenting with cryptocurrencies.
While other Canadian panelists noted that there is a rush to activate the use of clean energy sources within the cryptocurrency mining industry, Lane argued that this effort will not yet change the fact that Bitcoin needs considerable amounts of energy that would serve a better purpose.
Canada has no Plans to Emit a Cryptocurrency
Lane also addressed the cost and environmental impact of printing cash notes, but he defended this energy use, highlighting that this expense represents just a small part of the real value of the ticket itself that faces changing procedures in Canada.
The lieutenant governor commented on the matter: “The day those banknotes are no longer considered the king of daily transactions meet their replacements by privately backed cryptocurrencies is when the central bank expects it to have to intervene with its digital currency”. Lane added that the Bank of Canada does not see a need at this time to issue its digital currency.
The comments reflect an early statement Lane did. During the FinTech RDV 2020 event in Montreal, held in February 2020, the lieutenant governor had already stated that he does not see any benefit in creating a digital currency at the moment.
By: Jenson Nuñez
