Top officials from the Bank of Canada rebuked claims that Bitcoin, or any other cryptocurrency for that matter, could substitute the Canadian dollar in the face of the country’s rising inflation, according to a Global News report.
During testimony before the finance committee of the House of Commons on Monday, Liberal MP Yvan Baker asked the bank’s governor Tiff Macklem and senior deputy governor Carolyn Rogers whether the use of crypto could represent an effective strategy against inflation.
“I think if Canadians are looking for a stable source of payment and a stable source of value, cryptocurrencies don’t really meet that test,” Rogers responded. “We don’t see cryptocurrencies as a way for Canadians to opt out of inflation or a stable source of value.”
Canada's inflation rate soared to a 31-year high of 6.7% in March, with Statistics Canada reporting that all eight categories of the country’s economy it tracks—from food and energy to shelter costs and transportation—were on the rise.
Pierre Poilievre, Conservative Party leadership candidate, earlier stated that he wanted to see Canada as “the blockchain capital of the world” and “give people back control of their money,” which would require keeping cryptocurrencies legal.
Last month, Poilievre also posted a video of himself buying a shawarma using Bitcoin’s Lightning Network at a London, Ontario-based restaurant, stressing the importance of new technologies and support for local businesses.
Give people back control of their money. Keep crypto legal and let it thrive.
Become a party member, so you can vote for me as leader, and let's make Canada the blockchain capital of the world: https://t.co/d9I1ky9w2t pic.twitter.com/S1IcVETmZF
— Pierre Poilievre (@PierrePoilievre) March 29, 2022
However, according to a Reuters report, despite the “promising benefits from innovation in the financial sector,” Macklem stated that “we certainly expect the Canadian dollar will remain at the center of the Canadian financial system."
Bank of Canada’s CBDC research
The Bank of Canada is currently working on its own central bank digital currency (CBDC), with the Massachusetts Institute of Technology (MIT) joining the regulator’s research efforts last month.
A CBDC is the digital form of a country’s fiat currency. Unlike decentralized cryptocurrencies, they are usually controlled by the central bankers and the federal government, so it is not surprising that many politicians have argued that a CBDC would be a better option for payments than crypto.
However, whether or not the central bank adopts its own digital currency will be up to the Parliament to decide.
“There’s some important innovations there and I think the legislative review will allow us to explore those innovations but also look for ways that we can get at those benefits in a more regulated environment,” said Rogers.