Department of Finance Canada Raised Issues with Facebook’s Digital Currency

Documents from Canada’s Internal Finance suggest that lawmakers have issues with Facebook’s proposed digital currency system and question what effects it will have on the Canadian economy.

Canadian press were able to obtain a note from an Internal Finance meeting held last summer, where officials noted that Facebook had yet to address multiple issues with its proposed currency system. The Canadian government also noted that they were looking for ways to mitigate risk to the proposal.

Facebook’s currency option would be a “stablecoin”, which are less volatile than other popular crytocurrencies like Bitcoin or Ethereum. The Internal Finance department did not raise any issues with Bitcoin in the note.

Financial institutions like Bank of Canada have shown significant interest in Facebook’s digital currency system, which has been backed by partner company Diem with liquid assets and securities in various governments to help ensure stability. The currency system could be used by Facebook users for everyday purchases provided the vendor accepts it.

Officials worry that this could spark a sizeable shift in the currency markets, with users being able to go to Facebook for loans or credit without needing a bank as an intermediary. 

Facebook and other companies attempting to launch digital currency systems will likely face “multiple layers” of regulation according to Addison Cameron-Huff in an interview with Yahoo Finance

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