The US Massachusetts Institute of Technology (MIT) and the Bank of Canada have announced an agreement to collaborate on CBDC (Central Bank Digital Currency) research.
After exploring CBDCs for several years, the Bank of Canada has decided to step things up by partnering with MIT to embark on a 12-month research project focusing on the usefulness and technical aspects of CBDCs. As per the bank’s official press release:
The project forms part of the bank’s wider research and development agenda on digital currencies and fintech. It will focus on exploring and experimenting with potential technology approaches to determine how a CBDC could work.
Bank of Canada press release
The bank didn’t clarify if it intends to introduce a CBDC in the country. Updates on the findings will be provided at the end of the project period.
CBDC? Maybe; Crypto? Frozen and Seized
Canada embarked on CBDC studies in 2020 when it published a report titled Contingency Planning for a Central Bank Digital Currency. This was a year before the cryptocurrency market boomed and the world started exploring the possibilities. Now, a large swathe of countries are either researching or testing CBDCs, as per CBDC Tracker.
Canadian authorities, however, have proven to be anything but a Western liberal democracy, as they have described themselves. At first, the government demonstrated strong support for cryptocurrencies, allowing management firms and investment companies to launch crypto exchange-traded funds (ETFs) in the country.
However, a month ago, Canada decided to invoke the Emergency Act, cutting off crowdfunding for the Freedom Convoy, which had amassed millions of dollars in crypto donations.
If the Central Bank decides to issue a national CBDC, it can oversee all transactions being made with it. This is something the crypto community has protested about on numerous occasions, with famous whistleblower and former NSA agent Edward Snowden calling CBDCs a “perversion of crypto”.
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