The Bank of Canada says it’s looking at the possible benefits of issuing electronic money.
Senior Deputy Governor Carolyn Wilkins highlighted the risks associated with e-currencies for consumers, such as a lack of recourse if money is lost or stolen, or if an exchange fails.
She said that people should be aware that these digital currencies are not regulated and have limited or no user protection.
Digital currencies are not large enough to pose any material risk to Canadian financial stability as a whole, said Wilkins, but the Bank of Canada is keeping an eye on its use.
Wilkins said in a prepared text to be delivered in Waterloo, Ontario:
“In the unlikely situation in which cryptocurrencies were used broadly, a significant proportion of economic transactions would not be denominated in Canadian dollars,”
“This would reduce the bank’s ability to influence macroeconomic activity through Canadian interest rates,”
The Bank of Canada has been helping the federal government to modernize oversight frameworks, according to Wilkins, adding that the central bank is also researching the merits of issuing e-money.