Bank of Canada to publish payment experiment results in coming months

Wed Nov 2, 2016 3:32pm EDT
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By Alastair Sharp

TORONTO (Reuters) - The Bank of Canada will in the coming months publish the results of its experiment with a payments system based on the technology behind the bitcoin virtual currency, a senior central bank official said on Wednesday.

The purpose of building the prototype was to see what benefits the blockchain technology could provide and where the risks might lie, Carolyn Wilkins, senior deputy governor of the Bank of Canada, said.

Payments Canada and R3, a New York-based research consortium that includes all of Canada's major banks, also worked on the project, she said.

"It's been a very useful exercise and we'll be publishing the results sometime in the next few months," Wilkins said at a conference hosted by the Ontario Securities Commission.

Blockchain allows users to conduct secure transactions with each other without the need for middlemen or central oversight, unlike traditional electronic funds transfers.

Wilkins said in June that the Bank of Canada had been working with commercial banks to build the experimental interbank payment system.

A slide from a presentation viewed by Reuters at the time showed the banks in the experiment would pledge cash collateral in a pool that the Bank of Canada would convert into a digital version. The digital currency would then be used as a medium of exchange and could be converted back to cash.

Wilkins said on Wednesday the experiment used a "wholesale digital currency."   Continued...

A man is reflected in a window while walking past the Bank of Canada office in Ottawa, Ontario, Canada, May 25, 2016. REUTERS/Chris Wattie