The National Digital Currency (CBDC) will benefit citizens by breaking up the monopolies of large tech companies and banks. This conclusion is contained in a study by Bank of Canada analysts.
The authors of “The Positive Case for a CBDC” concluded that a digital version of the Canadian dollar is “likely necessary” to boost competition in the economy.
Consumers would be able to hold funds without risk and without the need for intermediaries from credit institutions. With CBDC they could do without credit cards, whose issuers are often the subject of antitrust investigations.
According to the analysts, the digital currency could serve as a “balanced solution” in limiting the market power of IT giants and countering external influence, at least in the payments space.
Thanks to the programmable capabilities of smart contracts, CBDC will spur active innovation and increase competition in digital services.
Experts also noted risks associated with this: coding errors, vulnerability to cyberattacks, scalability problems and challenges in transferring off-chain data to the blockchain.
The researchers reminded that the Bank of Canada would issue CBDC provided there is a sustained decline in public interest in using cash or in the event of a threat to monetary sovereignty from an alternative digital currency. They assessed the probability of the latter scenario as low.
Analysts emphasised that should a positive decision to issue the digital Canadian dollar be made, amendments to antitrust legislation would be required.
In July, the People’s Bank of China published white paper on the digital yuan.
Earlier, the Governing Council of the European Central Bank approved moving to the CBDC research phase.
The Positive Case for a CBDC by ForkLog on Scribd
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