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Central Bank of Canada’s Timothy Lane believes banks should have their CBDCs ready if the scales are blocked

October 16, 2020

According to a report dated October 15 The Canadian press, Bank of Canada (BoC) deputy governor Timothy Lane said central banks should hold their own digital currency in case regulators block Facebook’s Libra token. He also indicated that such an asset is important as a possible solution to the economic realities due to COVID-19.

Lane spoke at an online panel discussion hosted by the Central Bank Payments Conference. It states that the Bank of Canada has developed a central bank digital currency (CBDC) at a “good pace”. He said the bank needs to find out what Canadians want from a digital currency. But he added that Facebook’s efforts to introduce the scale could help improve cross-border payments.. He also noted that this could help non-banks and under-banks become part of the global economy.

“That’s the gist of the question: is the answer to the scales or something that the central banks are doing?” Said Lane. “If we say well it should be (a CBDC and) not a Libra, then we have to have something ready so that when a decision is made, the central bank digital currency is the right way to really start.”

Central Bank of Canada’s Timothy Lane believes banks should have their CBDCs ready if the scales are blocked
Central Bank of Canada’s Timothy Lane believes banks should have their CBDCs ready if the scales are blocked

The lieutenant governor’s comments are a change from those of February before the pandemic, when he explained that “There was no imperative” for the bank to create a CBDC. He The Central Bank of Canada recently released a report calling CBDCs “risky”. given the competition between cryptocurrency exchanges and banks and the use of digital currencies for transactions.

Global regulators, including the G20 financial watchdog, the The Financial Stability Board (FSB) recently published regulatory recommendations against global stablecoins like Libra. The group claimed that such stable coins could be “systemically important” undermine the ability of governments in all jurisdictions to dictate monetary and investment policies within their borders.

Cointelegraph reported on October 12th Seven G20 members, who represent the world’s largest economies, said they would initially speak out against launching global stablecoin projects, which would include the Libra, until proper regulatory oversight is in place. The group of seven has raised concerns about how to ensure digital assets comply with anti-money laundering laws, consumer protection rules and other regulatory issues.

“The advancement here is not in disrupting or competing with the system, but in increasing consumers’ payment options and completing the system.” said the political director of the Libra Association, Julien Le Goc, in the same online dashboard as Lane.