The Globe and Mail reports in its Tuesday, June 29, edition former Bank of Canada governor Mark Carney on Monday said commercial banks could face a period of disruption and heightened competition as digital currencies upend payment systems and undermine existing models for bank financing.
The Globe's Mark Rendell writes that Mr. Carney argued in favour of central bank digital currencies (CBDCs), in a speech to the Bank for International Settlements (BIS). He cautioned, however, that public forms of digital cash could alter the structure of the banking system and negatively affect incumbent banks and financial services companies.
He said banks "will have to adapt to a much more competitive environment." The BOC says a "digital loonie" is not necessary yet, but it has expedited its research into public digital cash.
Mr. Carney, however, said major changes to the money system are imminent, "The old normal of cash, bank-based finance and bank payments rails is crumbling."
He urged central bankers to act quickly to prevent the "Uberisation of money" -- a situation where powerful technology firms use their existing digital networks to establish monopolies in digital payments markets.
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