The Bank of Canada (BoC) has launched a public consultation to seek input from Canadians on the possible creation of a digital Canadian dollar. The consultation will run from May 8 until June 19, and the bank has emphasized it is not currently developing a central bank digital currency (CBDC) nor looking to replace cash. Rather, it is exploring the idea of a digital Canadian dollar as the world becomes increasingly digital. Senior Deputy Governor of the BoC, Carolyn Rogers, stated that the bank is seeking to hear from Canadians what they value most in the design of a digital dollar. The input will help the bank make decisions relating to the security and reliability of a potential digital currency, as well as ensuring it meets the needs of Canadians.
The BoC highlighted that it is important to consider the possibility of a digital Canadian dollar as cash usage declines, potentially excluding many Canadians from the economy. The bank also acknowledged the potential risks posed by the use of foreign CBDCs or cryptocurrencies, which could threaten the stability of the Canadian financial system.
The consultation’s questionnaire covers a wide range of topics, including payment methods used in the last month, how often the respondent would potentially use a Canadian CBDC, and what design features they would like to see. It also asks whether the respondent currently holds or uses cryptocurrencies and features demographic questions about age, gender, education, and income.
If a CBDC was issued, physical notes would still be provided “for those who want them,” according to the bank. The BoC said it will publish a report summarizing the consultation later this year.
While the consultation does not necessarily mean that a digital Canadian dollar will be created, it is a significant step towards exploring the possibility. Canada is not the only country considering a CBDC, with many central banks worldwide exploring the potential of digital currencies. The BoC’s consultation seeks to ensure that the bank makes an informed decision on the matter, taking into account the needs and desires of Canadians.
The International Organization of Securities Commissions (IOSCO) has announced that it will launch a consultation on its regulation report for crypto assets in the second quarter of 2023. This consultation will be followed by the publication of the final recommendations by the end of the year.
The dates for the consultation and final report are included in IOSCO’s work program for 2023-24. The Fintech Task Force plan of IOSCO includes two major workflows dedicated to decentralized assets. The first workflow focuses on crypto and digital assets, and the second workflow focuses on decentralized finance (DeFi).
The IOSCO’s report will provide recommendations on how to regulate crypto assets, including digital currencies and tokens. These recommendations will be based on consultations with relevant stakeholders, including regulators, industry players, and investors. The report will also analyze the risks and opportunities of crypto assets and how they fit within the existing regulatory framework.
The consultation on decentralized finance (DeFi) will begin in the third quarter of 2023. The DeFi market has grown significantly in recent years, and regulators are increasingly focusing on its potential risks and challenges. IOSCO’s consultation will seek input on how to regulate DeFi platforms, decentralized exchanges, and other DeFi applications.
The Fintech Task Force plan of IOSCO reflects the increasing importance of digital assets and decentralized finance in the global financial system. IOSCO recognizes the need for regulatory clarity and consistency to ensure investor protection and market integrity. The organization aims to provide a framework that balances innovation and risk management in the fast-evolving digital asset landscape.
The IOSCO’s consultation on crypto regulation and DeFi will be closely watched by the industry and the regulatory community. It will be interesting to see how IOSCO addresses the complex and evolving issues related to digital assets, such as custody, trading, and market manipulation. The consultations will provide an opportunity for stakeholders to share their views and concerns on the regulatory approach to crypto assets and DeFi.
In conclusion, IOSCO’s consultation on crypto assets and DeFi is a significant step towards establishing a coherent and effective regulatory framework for digital assets. The recommendations and guidelines from the organization will help to promote investor confidence and foster innovation in the rapidly evolving digital asset market.