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November 25, 2021

Canada Needs a Digital Dollar in the New Crypto World

  • With Canada on the cusp of a new chapter in its monetary history as cryptocurrencies grow in popularity, the Bank of Canada should issue a central bank digital currency to facilitate the emergence of Canadian dollar stablecoins, according to a new report from the C.D. Howe Institute.
  • Authors Mark Zelmer and Jeremy Kronick discuss the use of stablecoins – an emerging cryptocurrency, which unlike others is linked to varying degrees with fiat currency or conventional assets – and how Canada can reap the microeconomic rewards from privately issued cryptocurrencies, without jeopardizing the important macroeconomic benefits that come with Canada’s current monetary sovereignty.
  • Zelmer and Kronick explain that Canadian-dollar-linked stablecoins could become attractive to Canadians by making them convertible into cash issued by the Bank of Canada, and ensuring that stablecoins are well designed and regulated from business conduct, competitive, operational, privacy and prudential perspectives.
Mark Zelmer

Mark Zelmer has more than 30 years experience dealing with financial sector policy and regulatory issues having worked for the Office of the Superintendent of Financial Institutions, Canada (OSFI); the Bank of Canada; and the International Monetary Fund (IMF).

Jeremy Kronick

Jeremy is Associate Director, Research at the C.D. Howe Institute, where he is in charge of the financial services and monetary policy research programs. He has written on a range of topics including the link between demographics and monetary policy, how blockchain technology will impact the economy, and the importance of the financial services sector in trade negotiations.