Bank of Canada Senior Deputy Governor Carolyn Wilkins says digital currencies are changing the financial landscape, but she doesn’t see an end to cash anytime soon.
“Money that’s worth the name to be called money really does have to be a medium of exchange, a store of value -- and the digital currencies that are out there right now don’t fulfill them -- Bitcoin doesn’t, none of them do,” Wilkins said, speaking Thursday at an Institute of International Finance meeting in Washington.
Central banks from Sweden to Canada are studying digital currencies, looking at whether Bitcoin-like methods of exchange could become more widespread as fewer people use paper money. The shift toward digital payments raises questions about whether central banks should issue their own version of cryptocurrency, yet practical questions remain.
Security would be an issue, Wilkins said, noting also that digital payments rely on the electrical grid -- so until there’s a way to exchange value if the lights go out, they’re unlikely to dominate.
“From the Bank of Canada’s point of view, we’re looking at all that, but no decisions have been made,” Wilkins said of central bank digital coin. It’s in the “early research phase.”
Bitcoin breached $5,000 for the first time Thursday, pushing this year’s gains to more than fivefold, driven in part by increasing institutional interest.
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