Updated 11 Jun, 2021

Bank of Canada Vows to Create a Greener-than-Bitcoin CBDC

Bank of Canada


Key Takeaways:

  • BOC Deputy Governor says the central bank’s digital currency will be greener than Bitcoin.
  • Canada’s central bank does not see cryptocurrencies to present a threat to the Canadian dollar.

Canada’s central bank is discussing the need for a digital Canadian dollar

The Bank of Canada is considering the idea of launching a central bank digital currency (CBDC). While Canada’s central bank has not officially stated it will develop and launch its own digital currency. On the other hand, deputy governor Timothy Lane has said that the project will be much greener than Bitcoin.

“Clearly, there’s a high degree of public trust in what we’re offering, and so when we think about a central bank digital currency, that trust is an important thing we’re bringing to the table,” the deputy governor said on a panel. The Canadian Chamber of Commerce hosted the panel last week.

“That, of course, means that we wouldn’t have to rely on those environmentally, very wasteful methods of mining technologies that we’ve seen with cryptocurrencies.,” Mr. Lane said as he made his push toward using clean and renewable energy in CBDC transactions.

“You can substitute clean energy for dirty energy, but of course, clean energy also has other uses. If you use an extra gigawatt of clean energy to mine Bitcoins, that’s a gigawatt less that is being used for some useful purpose,” Mr.Lane clarified.

Bitcoin’s environmental impact is noticed by an increasing number of companies

Bitcoin’s carbon footprint began to flare up debates. This came after Tesla CEO Elon Musk announced in mid-May that Tesla will no longer support Bitcoin payments due to the energy-intensive mining process. Square, a payment company led by bitcoin evangelist Jack Dorsey, also confirmed it will put its bitcoin buying on hold until cleaner mining methods are available.

A Canadian dollar on the blockchain is still far away in the future. The deputy governor of the Canadian central bank said that they have been discussing the idea of creating a “digital loonie”.

However, for the time being, it is still too early as the majority of people are using fiat currencies. Presently, there is no chance of them being replaced by cryptocurrencies.