A momentous development in digital currency was announced in a low-key way at the Payments Panorama conference in Calgary. In a closed-to-media event, the Canadian Payments Association and the Royal Bank of Canada said they have been experimenting with a digital fiat currency called CAD-COIN.
The Bank of Canada and the Canadian Payments Association insisted that they do not currently have plans to issue a digital fiat currency. Nevertheless, they are experimenting with it, suggesting that eventually they will.
“One of the bank’s many fintech research projects… is to build a proof of concept wholesale interbank payment system using a distributed ledger…” said Carolyn Wilkins, the senior deputy governor for The Bank of Canada. “The Bank’s goal in these projects is solely to better understand the technology first-hand. Other frameworks need to be investigated, and there are many hurdles that need to be cleared before such a system would be ever be ready for prime time,” she added.
Wilkins denied that their experiments were intended to develop e-money for use by the general public. But, if the Canadian Payment Association and the banks are trying to overcome hurdles and investigate other frameworks to get it ready for prime time, you can bet that it will eventually come.
The trial is the first national currency being tried in a virtual environment. They are using it to conduct payments directly in the virtual environment. The experiment makes it possible to now actually transfer value on the blockchain. Usually any participants in a deal have to go out of the virtual environment to make the actual transfer of money.
“The big five” banks in Canada are all involved with the central bank in the experiment. It is also the first step in the “blockchain-ification” of the banks.
But it’s not just Canada. The U.S. Federal Reserve has been approached by a number of blockchain startups along with 100 other central bankers at an event hosted by the International Monetary Fund and the World Bank.
Also, the Bank of Tokyo has confirmed that it is experimenting with digital currency in the blockchain and will release a virtual currency next year. Though it will not be a fiat currency, it will be a huge step in that direction. A fiat currency can be manipulated by governments.
The idea of digital fiat currency is not yet widely accepted, but if the U.S. issued dollars on the blockchain, it could happen pretty quickly.
Think of the control that would provide central banks and governments over their citizens! Some predict, however, that in a year or less, fiat digital currency will become much more accepted.
The Bible predicts that those who do not receive the mark of the beast, will not be permitted to buy or sell. A digital currency would be very easy to control whether it is fiat or merely virtual. “Work while it is day, for the night cometh when no man can work.” John 9:4.
“And he causeth all, both small and great, rich and poor, free and bond, to receive a mark in their right hand, or in their foreheads: And that no man might buy or sell, save he that had the mark, or the name of the beast, or the number of his name.” Revelation 13:16, 17.
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