Pierre Poilievre promises to quash Bank of Canada's foray into digital currency

Conservative leadership contender Pierre Poilievre promised Thursday he'd spike the Bank of Canada's proposal to offer a digital currency, saying this sort of financial instrument should be left to the private sector.

Poilievre has emerged as a fierce critic of Canada's central bank. He's tried to link decades-high inflation to its COVID-era policy of quantitative easing, recently slamming the institution as "financially illiterate."

Poilievre said, if elected, he'd extend the auditor general's authority to include the Bank of Canada and he would push for a review of its pandemic policies.

"Justin Trudeau has threatened the Bank of Canada's independence with a half-trillion dollars of deficits that required the central bank to print money and cause inflation," Poilievre said.

"That's 'Justinflation,'" he said, using his gag name for inflation rates under the Liberal government. "I will end it, by restoring central bank independence, mandating an independent audit of all the money printing and stopping the risky central bank digital currency."

Poilievre is a big proponent of cryptocurrencies such as bitcoin. He has suggested that Canadians can "opt out" of inflation by pouring money into these investments, and he doesn't want the Bank of Canada to offer a competing product.

Bitcoin has had a volatile run in recent months as central banks have increased interest rates to tackle pandemic-driven inflation, making speculative investments less attractive. The price of bitcoin has dropped some 40 per cent since its November 2021 high.

In this environment, the central bank has been studying the viability of creating its own digital currency — digital tokens, similar to cryptocurrency, that would be pegged to the value of the Canadian dollar.

Central banks around the world are concerned that the explosive growth of bitcoin could destabilize the existing financial system.

In response, a number of banks are proposing government-backed digital currencies that are issued and regulated by the country's monetary authority — a product that could offer the convenience of crypto with the full faith and backing of the government that issued them.

The European Union and China have already signalled digital currencies will be launched in their respective jurisdictions.

Carolyn Rogers, the senior deputy governor of the Bank of Canada, told MPs at the Commons finance committee Monday that the central bank is in the "development stage" of its digital currency, though a decision on whether to press ahead will ultimately lie with the government.

"We view our job as to be ready, to have done the work ahead of time, so that if we decide that a central bank digital currency is something that would benefit Canadians, that we're ready to provide it," Rogers said.

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