The Canadian dollar will remain at the heart of the country’s financial system, the governor of the central bank said on Monday, in response to questions about a Conservative leadership candidate’s pledge to make Canada the world’s blockchain capital.
“In the financial sector, there are promising benefits from innovation. Having said that, we believe the Canadian dollar will continue to be at the heart of the Canadian financial system “Tiff Macklem, Governor of the Bank of Canada, testified before a House of Commons committee.
The Bank of Canada is currently developing its own central bank digital currency, known as a digital loonie, which could be launched if private digital tender becomes popular as a payment system.
Pierre Poilievre, a leading candidate for the Conservative Party’s leadership, has stated that if elected, he would support a “new, decentralized, bottom-up economy that allows people to reclaim control of their money from bankers and politicians.”
He has posted videos of himself purchasing lunch with Bitcoin to demonstrate its usability, and he frequently promotes cryptocurrencies as a way for Canadians to “opt-out of inflation.”
Poilievre is leading in all polls ahead of the Conservative Party’s leadership election in September. Poilievre was favored by 25% of Conservatives polled by the Angus Reid Institute last month, compared to 20% for his closest rival, Jean Charest.
The Bank of Canada has previously stated that cryptocurrencies such as Bitcoin are speculative investments with “no plausible claim to be the money of the future.”
Senior Deputy Governor Carolyn Rogers told lawmakers on Monday that the central bank has entered the development stage of its digital currency, though the decision on whether or not to proceed is up to the government.
“We see our job as being ready, doing the work ahead of time so that if we decide that a central bank digital currency would benefit Canadians, we’re ready to provide it,” she explained.
Poilievre has made taming soaring inflation one of his top campaign issues, criticizing both Liberal Prime Minister Justin Trudeau’s government and the central bank for allowing it to spiral out of control.
In March, inflation in Canada reached a 31-year high of 6.7 percent, as countries around the world grappled with booming demand and global supply chain bottlenecks. Russia’s invasion of Ukraine has impacted commodity prices, pushing them even higher.
Bitcoin, on the other hand, reached a record high of more than $68,000 in late 2021 before more than halving in January. It is now worth around $40,000 in the market.