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Canada denies interest in digital currency

Photo of: Joseph Stone
by Joseph Stone

The Central Bank takes into account the current debate around the energy consumption of cryptocurrencies. Its future CBDC, it assures, will be environmentally conscious.
The debate around the power consumption of cryptocurrencies, and in particular Bitcoin, is not new. However, it has come back to the forefront following criticism from Tesla and Elon Musk.

The topic of the environment is not unique to crypto-assets though. Within banking institutions, this topic is also at the forefront. Canada’s central bank is unambiguous on the matter.

Like other central banks, it is considering the issue of a digital currency, an electronic Canadian dollar. However, this is not yet a reality. According to its deputy governor, Timothy Lane, there is no need for such a CBDC at this time.

However, one feature of this future CBDC is already evident: its concern for the environment. This was stated by the head of the central bank at a conference of the Canadian Chamber of Commerce.

“That means, of course, that we wouldn’t have to rely on these very environmentally consuming technological methods of mining, as we’ve seen with cryptocurrencies,” he says.

The response is getting organized in the face of this emerging distrust of cryptocurrencies and their energy consumption. Elon Musk was at a meeting of the leading Bitcoin mining industry earlier this week.

The latter plan to be more transparent about their energy balance, but also to make more intensive use of renewable energy. This solution is not enough for the central banker, however.

“You can substitute clean energy for dirty energy, but of course clean energy has other uses,” he says. And Timothy Lane continues. “If you use an extra gigawatt of clean energy to mine bitcoin, that’s one less gigawatt used for useful purposes. “

The printing of bitcoin by Canada’s central bank is not without impact or cost in terms of energy, however. For the deputy governor, however, it is only a fraction of the value of the bill itself.

But cash otherwise continues to be considered a safe bet by citizens. What if cryptocurrencies were to supplant them? Then the central bank believes it would be necessary to issue its own digital currency.