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  • Canada is hoping to remove the “direct threat” of cryptocurrencies by using the digital currency to track Canadians’ transactions.
  • The digital currency is supposed to eventually replace paper money in circulation.

The Bank of Canada is allegedly entertaining the idea of having a central bank-issued digital currency. The said currency will be used to fight the “direct threat” of other cryptocurrencies. Moreover, it could help in the collection of data on how people spend their money according to a report by The Logic.

The central bank governor, Stephen Poloz and the board of directors at the bank have already been presented with a proposal that gives an insight into the digital currency. The presentation stated that the digital currency will be distributed widely.

In the initial stages, the digital currency will exist side by side with the Canadian dollar. However, the goal is to phase out paper money leaving only the digital currency in circulation.

Canada is not the only central bank considering launching a sovereign digital currency. The People’s Bank of China (PBOC) is currently working on a digital currency that would eventually replace the fiat money.