Bank of Canada develops blockchain-based digital version of Canadian dollar

The Bank of Canada revealed yesterday that it is developing a digital version of the Canadian dollar based on blockchain technology, called CAD-coin.

The project, codenamed Jasper, is intended to explore emerging technologies more broadly, according to the Financial Times, and other major banks, including Bank of Montreal, Canadian Imperial Bank of Commerce, Royal Bank of Canada, Scotiabank and TD Bank, as well as startup banking consortium R3CEV, are said to be involved in the work.

A set of slides published by Forbes provides more details on the project, indicating that the Bank of Canada is testing a system where participants can deposit central bank-issued banknotes and then exchange them for CAD-coins.

Once verified, the transaction will be processed, but the central bank will reserve the right to destroy CAD-coins if necessary.

The central bank is expected to release more details about the plan and its approach to technology when Carolyn Wilkins, senior deputy governor at the Bank of Canada, is scheduled to give a speech on Friday.