Bank of Canada’s governor Stephen Poloz shares his vision in stablecoins and digitalization in 2020
Stephen Poloz, Bank of Canada’s governor, shared his future vision and issues for 2020. At his year-end speech, Governor Poloz discussed economic issues and structural forces acting on Canada’s global economy. His speech focused on Canada’s inflation, population growth, monetary policy, and other fiscal concerns. He also mentioned the impact of digitalization and the future of money. In this context, Governor Poloz pointed out that rising payment technology, which includes Bitcoin and stablecoin applications, will be continued to study.
He said the massive forces of low-interest rates, rising debt, and technological change put big pressure on households, companies, and governments. The impact of these forces will keep the Bank of Canada busy in 2020 and beyond.
When interest rates are low, households, firms, and governments are likely to borrow more which supports the economy; however, high debt means more vulnerability if something bad happens.
Near the end of the speech, he made an open question that if the Bank of Canada would ever see it is necessary to create a digital currency as a substitute for cash. However, the world of money is evolving very dramatically, so development plans are necessary to deal with whatever contingency arises. He went on to say due to digital currency’s global potential, it is attracting attention from central banks and other regulatory authorities.
Governor Poloz also talked about in his future of money vision, ongoing efforts with Payments Canada to innovate core payment systems. The Bank of Canada keeps on its technology sandboxes studying these proposed innovations. This shows that the influence of Facebook’s Libra and cryptocurrencies will continue in 2020 to influence policy regulators. However, even though the adoption of new technologies boosts the economy’s potential to grow and raises living standards, it would also affect inflation.
The Governor concluded by expressing confidence in Canada’s ability to face current challenges by the characteristics that they always have are hard work and ingenuity.
Governor Stephen Poloz’S retirement
Governor Stephen Poloz will step down his position on June 2, 2020. He has informed that he will not participate in the second term as Governor when his seven-year term. The Board of Directors of the Bank of Canada has begun a search process to select the next Governor of the Bank.
He shared that serving as the 9th Governor of the Bank of Canada is an honor, and his time as Governor is the most fulfilling of his career. During his term, the Bank created the conditions for steady economic growth, low unemployment, and inflation close to target through very challenging times.
The Board’s lead independent director, Claire Kennedy said Stephen Poloz has made an invaluable contribution to the welfare of all Canadians.