Canadian Dollar to Stay at Core of Financial System, Not Crypto -BoC

The central bank president indicated on Monday that the Canadian dollar would remain at the heart of the country's financial system, in response to queries about a Conservative leadership candidate's ambition to make Canada the world's blockchain capital.

"Innovation in the financial industry has the potential to provide significant advantages. In evidence before a House of Commons committee, Bank of Canada Governor Tiff Macklem remarked, "We absolutely anticipate the Canadian dollar to continue at the hub of the Canadian financial system."

The Bank of Canada is presently developing its own digital currency, dubbed the "digital loonie," which might be introduced if private digital tenders gain traction as a payment method.

Pierre Poilievre, a strong contender for the Conservative Party's leadership, has said 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's made movies showing himself eating lunch with Bitcoin to demonstrate its utility, and he often promotes cryptocurrencies as a way for Canadians to "opt-out of inflation."

Poilievre is leading in all surveys ahead of the Conservative Party's leadership election in September. Poilievre was preferred by 25% of Conservatives surveyed by the Angus Reid Institute last month, compared to 20% for Jean Charest, his closest rival.

Bitcoin, according to the Bank of Canada, is a speculative investment that "does not have a legitimate claim to become the money of the future."

Senior Deputy Governor Carolyn Rogers told MPs on Monday that the central bank's digital currency has progressed to the development stage, albeit the government must decide whether to proceed.

"We see our duty as being ready, having done the work ahead of time, so that if we determine that a central bank digital currency would be beneficial to Canadians, we're ready to offer it," she added.

Poilievre has made taming rising inflation one of his main campaign topics, criticizing both Prime Minister Justin Trudeau's administration and the central bank for allowing it to spiral out of control.

Inflation in Canada reached a 31-year high of 6.7 percent in March, as nations throughout the globe grapple with soaring demand and bottlenecks in global supply systems. Russia's invasion of Ukraine has impacted commodities prices, driving them further higher.

Bitcoin, on the other hand, reached a peak of almost $68,000 in late 2021 before nearly halving in January. It's currently worth about $40,000.