Pierre Poilievre Vows To Nullify Bank Of Canada Foray Into Digital Currency

Conservative leadership contender Pierre Poilievre vowed on Thursday that he would push the Bank of Canada’s proposal to offer a digital currency, saying this type of financial instrument should be left to the private sector.

Poilievre has become a fierce critic of Canada’s central bank. He has tried to link decades-long high inflation to his COVID-era quantitative easing policy, recently criticizing the institution as “financially illiterate.”

Poilievre said that, if elected, he would expand the auditor general’s authority to include the Bank of Canada and push for its anti-pandemic policies to be reviewed.

“Justin Trudeau has threatened the independence of the Bank of Canada with a half-trillion dollar deficit that required the central bank to print money and caused inflation,” Poilievre said.

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

State-Backed Crypto Similar To Nationalization, Says Poilievre Campaign

Poilievre is a big supporter of cryptocurrencies like bitcoin. He has suggested that Canadians can “opt out” of inflation by putting money into these investments, and he doesn’t want the Bank of Canada to offer a competitive product.

Bitcoin has had a volatile run in recent months as central banks have raised interest rates to deal with pandemic-driven inflation, making speculative investments less attractive. The bitcoin price is down 40 percent from its November 2021 high.

In this environment, the central bank has been studying the feasibility of creating its own digital currency: digital tokens, similar to cryptocurrencies, 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.

An advertisement for bitcoin is displayed on a street in Hong Kong on February 17, 2022. (Photo by Kin Cheung/AP)

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 cryptocurrencies with the full faith and backing of the government that issued them.

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

Carolyn Rogers, senior deputy governor of the Bank of Canada, told MPs in the House of Commons finance committee on Monday that the central bank is in the “development stage” of its digital currency, although the decision to continue going forward will ultimately fall to the government.

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

LISTEN | The Front Burner podcast discusses the momentum behind Poilievre’s campaign:

front burner35:28Inside a Pierre Poilievre Conservative leadership rally

It is still early days in the race for the Conservative leadership, but candidate Pierre Poilievre appears to have momentum. He is drawing huge crowds at rallies across the country promising to make Canada “the freest country on Earth.” Front Burner Producer Allie Jaynes introduces you to some of the people who attended an event in Toronto last week, and CBC Politics Senior Reporter Catherine Cullen provides context on those crowds and how the type of Poilievre’s populism with previous candidates. 35:28

Speaking to reporters outside the Bank of Canada headquarters in Ottawa on Thursday, Poilievre said a digital currency would make the central bank a competitor to commercial banks, as Canadians could park their deposits at the bank-run institution. government.

According to a policy briefing provided to journalists, Poilievre’s campaign is concerned that a push to “nationalize” deposits will lead to “politicized banking.”

The report suggests that a deposit-taking central bank would be similar to a state bank and that politicians could “bless the voters” and “start making election promises of more generous interest rates for depositors or other benefits.”

Poilievre wants federal watchdog to audit central bank

Poilievre also said that, if elected, he would adopt Conservative MP Andrew Scheer’s private member’s bill, which would empower the auditor general to audit the Bank of Canada. The central bank is currently exempt from this type of supervision.

However, the Bank of Canada is already audited by two separate external firms, currently KPMG and PricewaterhouseCoopers, each year.

At least one expert, Kevin Page, a former parliamentary budget official, has said that the auditor general does not have the capacity to audit the central bank.

Historically, the Bank of Canada has been an institution free from political influence, so it could use monetary policy instruments to seek price stability or an inflation target.

While the government of the day cannot order this independent parliamentary official to look into anything in particular, Poilievre said the attorney general “must investigate whether the Trudeau government interfered with the Bank of Canada’s independence” during the pandemic “using $400 billion of freshly printed money”. to finance their deficits.

As several other central banks did during the Great Recession of 2008-09, the Bank of Canada has embraced quantitative easing in the past two years to boost lending and spending during a time of financial panic. That policy ended in October 2021.

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