Last February, the Bank of Canada published a working paperSee Banknote paper. More comparing the introduction of banknotes with digital currencies. The analysis, named “Canadian Bank Notes and Dominion Notes_Bank of Canada_2017“, looks back at the country’s history with both privately and government-issued banknotes and draws parallels with the numerous digital currencies that are gradually arriving on the market. The analysis reviews the issuance of banknotes from 1800 until the establishment of the Bank of Canada in 1934 and compares competing public and private currencies.
Ben Fung, Scott Hendry and Warren Weber, authors of the working paper, aimed to assess the possible risks and benefits of the introduction of a vast group of new currencies made both by central banks and private entities. Several conclusions could be drawn from the comparison.
First, they determined that private digital currencies might circulate widely and simultaneously, “but only with appropriate government regulation to ensure their safety, soundness and uniformity”. In addition, they estimated that a central bank may launch its own e-currency, but that this one will not necessarily replace the existing private digital currencies and would conversely rather be an option among others. Finally, the authors suggested that these new forms of moneyFrom the Latin word moneta, nickname that was given by Romans to the goddess Juno because there was a minting workshop next to her temple. Money is any item that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular region, country or socio-economic context. Its onset dates back to the origins of humanity and its physical representation has taken on very varied forms until the appearance of metal coins. The banknote, a typical representati... More can also be victims of counterfeiting and are therefore not necessarily more secure than banknotes.
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