Govt-backed Digital Currency For More Control\r\nBitcoin came out more than a decade ago as a decentralized, peer-to-peer currency system that enabled privacy and bypassed government control. However, governments learned gradually how to deal with the emerging crypto space. As the saying goes \u2013 \u2018if you can\u2019t beat them, join them\u2019.\r\n\r\nAn internet BoC presentation, called \u201cCentral Bank Money: The Next Generation,\u201d claims that a digital currency issued by the central bank would have several benefits, as it would allow the sharing of personal data with tax authorities or police.\r\n\r\nThe Logic, which acquired the presentation through an access-to-information request, found out that the BoC is serious about developing its own digital currency to fight the \u201cdirect threat\u201d of cryptocurrencies. The upcoming digital coin would be widely available and initially be used in parallel with fiat money. In the end, the digital currency will remain the only form of money.\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\nCBDC Has Multiple Benefits\r\nThe BoC presentation was prepared by Stephen Murchison, an adviser to Governor Stephen Poloz. Murchison has led the central bank\u2019s digital currency research. After two years of in-depth analysis, he concluded that a central bank digital currency (CBDC) has multiple advantages. The document reads:\r\n\u201cWe need to innovate to stay in the game. [A CBDC] would provide all the benefits of a central bank-backed asset, as well as all the convenience and security of wireless, electronic payments.\u201d\r\nThe report lists a dozen of benefits and only one drawback. Specifically, a digital currency \u201cpresents a risk to stable, low-cost funding for (banks) (deposits),\u201d the document says.\r\n\r\nHowever, the central bank officially claims that it hasn\u2019t decided yet whether it would launch a digital currency.\r\n\r\nThe BoC agrees that banknotes are becoming obsolete. The bank might hurry up also because it is under pressure from the growing crypto space.\r\n\r\n\u201cCryptocurrencies may become a direct threat to our ability to implement monetary policy and lender of last resort (LOLR) role,\u201d the BoC says in its presentation.\r\n\r\nIf BoC succeeds with its plan, Canada will not be the only country to have a national digital currency.