The Central Bank of Canada informed on Thursday that it is developing a digital form of the Canadian dollar but based on blockchain technology.
With the name of CAD-coin, the project is part of a wider exploration of the emerging technology with a code name Project Jasper, that was reportedly unveiled during a private presentation, according to The Financial Times. There should be involved major banks like Bank of Montreal, CIBC, Royal Bank of Canada, Scotiabank and TD Bank, banking consortium startup R3CEV.
Forbes has posted a slide with even more details, showing that the Bank of Canada is testing a system in which participants would deposited cash to the bank that would then be converted into CAD-coin. Then the verified counterparties would process transactions, and the central bank would reserve the right to destroy CAD-coins as needed.
Bank of Canada senior deputy governor Carolyn Wilkins is scheduled to have a speech on this topic on Friday, that will find the central bank issuing more details about the program and its stance on the technology.
Just last week, representatives from more than 90 central banks met at the Federal Reserve for a session in which presentations and discussions were held on blockchain and its potential role in finance.
Carolyn Wilkins said to Coindesk the ‘CAD-coin’ project was intended “solely to better understand the technology first-hand”. She added that the scope of the Canadian central bank’s work is focused on the interbank area, and loads of key questions remain on the table.
Wilkins stated:
“Other frameworks need to be investigated, and there are many hurdles that need to be cleared before such a system would be ever be ready for prime time. None of our experiments are to develop central-bank issued e-money for use by the general public. These are still conceptual research questions that are being investigated by many central banks.”
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