Huobi Research Center | The Bank of Canada will announce the results of blockchain testing in the near future

According to a report translated by Huobi Blockchain Research Center, the Bank of Canada recently announced that it will release the results of its self-debugging blockchain test in the near future. As part of the project, the Bank of Canada constructed a functional blockchain prototype and a digital token based on legal currency.

Canada’s Central Bank Tests Blockchain Protocol

Carolyn Wilkins, senior deputy governor of the Bank of Canada, said the bank has built a new blockchain prototype to test the benefits and risks of the technology.

Citing Reuters, the deputy governor said R3 and Payments Canada had also joined the test.

Last November, Wilkins praised these emerging innovations in a speech at the University of Toronto's Rotman School of Management.

Last summer, Wilkins made it clear that the Bank of Canada and other commercial banks were testing private blockchain technology. She also emphasized the experimental nature of the project, claiming that the Bank of Canada had no intention of issuing its own cryptocurrency.

The Bank of Canada will announce the results soon

Reuters viewed a slide presentation of the bank’s experiment, which showed that the Bank of Canada used legal tender to back the digital currency, so the digital currency could be exchanged for Canadian legal tender at any time.

“This is a very practical experiment and we will publish the results of the test sometime in the next few months,” Wilkins told attendees at an event with the Ontario Securities Commission.

But Wilkins also emphasized that Canada's legal currency is the foundation and cornerstone of the Bank of Canada's monetary policy. Although the Bank of Canada is very interested in electronic currency, it also helps the bank operate on short-term interest rates, but she believes that Bitcoin is not very "suitable" for monetary policy. So she said:

“We believe that Bitcoin and other digital currencies are more like commodities than real currencies. As a means of transaction that is closely related to everyone in this room, its significance should be more than that.”

Traditional banking institutions mainly focus on licensed digital ledgers

Through the Bank of Canada's advocacy, the licensed ledger seems to be more suitable for banking institutions. Many financial institutions are working with companies such as Ripple, R3, and Hyperledger to test centralized federated blockchains. In August, R3 tried two data blockchain prototypes with 15 traditional banks including Wells Fargo, Barclays, BBVA, and BNP Paribas.

It’s no surprise that central banks are divided over what Bitcoin has to offer, as opting for a private blockchain solution would give them greater control over their own blockchain networks.

The Bank of Canada is another central bank that is researching and developing a distributed ledger framework, while the People’s Bank of China, the U.S. Federal Reserve and other institutions have also shown a keen interest in the technology.