Michael Doyle, Michael Jordan, Ten Years discussed on The Big Story

The Big Story


Future of money is this kind of stuff technologies like bitcoin and its underlying framework. The blockchain going to fundamentally we've themselves into the fabric of our society think about a world without a on the transfer of value between people. My big thing with block chain is it can. It can literally overthrow american china russia. I only know two things about cryptocurrency number one. I know some kinds of it are really bad for the environment and number two. I know that. I don't know enough about it to trust it. But cryptocurrency is not even the same thing as digital currency. Though i guess you could call the two. Competitors digital currency is being rolled out right now and countries around the world and our own bank of canada is busy trying to figure out what digital wallet for canadians with look like and what sort of digital looney would go inside it and regardless of my unease about the future of money and maybe yours to this is happening. It's just a question of when so what is digital currents and what makes it different from bitcoin and other cryptos. How different is this. From my banks where i already pay my bills and access my accounts. Why is the switch to digital currency becoming more and more urgent and what happens if the bank of canada is too slow and someone else gets there first jordan. Heath rawlings is the big story. Michael doyle is a freelance reporter and journalist based in toronto who examined the future of money in canada for the globe in mail. Hi michael jordan. Can you start us off. Just because it's such a useful way to think about this. At least i found it useful by telling us the story of money on the island of yap certainly Yup is a tiny island. That is now part of micronesia in the south pacific and for hundreds of years. They had a very unusual form of currency and that was these gigantic limestone rocks and the bigger they were the more valuable they were and also of course the bigger they were the more difficult they were to actually physically exchange with each other so over time they Just left the rocks where they were and In order for them to figure out who owned which rock which note of currency for lack of better term. They created basically a form of a ledger. And in the form of an oral history of who owned each rock and how the rocks transacted from person to person on the island and so that's how they effectively did business. That's how they exchanged Goods and services for hundreds of years. Now tell me how that relates to wear. Our use of money is heading certainly It's actually a really great analogy. Because in one example it sort of captures a snapshot of what money has been for hundreds if not thousands of years since the since we came up with the idea of money however long ago that was And at the same time it also short sort of shows us where technology is going to change money in the near future so the question of what money is a really weird thing. it's kind of like a philosophical rabbit hole. You go down but at it. Sort of core form money is trust right. It's him This way for us to trust each other by creating this commonly shared value and so the app stone became the sort of mode of trust for this For the islanders of yep but also because they used something similar to today's distributed ledger technology. That you hear about with a crypto currencies they offloaded that trust onto this shared idea or shared knowledge base An every single person on the island new who owned water who who had authority who had ownership over over each token and. That's not dissimilar to say bitcoin today And i mean the other thing that struck me about it is. You didn't have to be carrying around the stones to have it understood that they belong to you in in. That was your money. Which kind of brings me to the way. We understand even if not bitcoin digital cash. Because i was thinking about this the other day. When i read your piece. I don't think i've touched cash. More than twice. Since the beginning of the pandemic and i i don't think i'm alone either. Yeah and It's actually one of the reasons why i started thinking about this. And it's certainly one of the reasons why institutions like the bank of canada and other Central banks around the world have really started to think about this. Since the onset of the pandemic i been something that's been discussed for a number of years. The bank of canada has been researching Digitizing the loony for the better part of ten years i in my reporting but the pandemic has accelerated. There's some some people i spoke with. Two three years other said five years that the decline of the use of physical cash has has been obviously as aspirated by The pressures of the pandemic in the first months it was the fears that Covid would be transferred through the polymer notes that we use in canada and then subsequently. It's just something that we've gotten used to. You know you think about how you transact on a daily basis. It's mostly online now. I think that's not probably going to go away after the pandemic and even physical businesses have become. You know really accustomed to in a sort of got their their technology game Leveled up over the last fifteen or sixteen months. So when you say. The bank of canada is working on how to digitize the looney. My first question is what does that actually mean. And how is it different from me looking in my bank account and seeing i have ax number of loonies in their the one thing. We have to take into consideration. It's something that. I don't think many of us probably think about very often is that the percentage of actual physical cash. That's out there in. The world is actually quite small and candidates less than five percent of all of our wealth in this country of all the money or the kind of the idea of money that moves around everything. It's an bank accounts and that we have in our pockets and savings and so on and so forth less than five percent of that is actual physical cash. The rest of it for the most part is in terms of Deposits within Commercial banks when we think about banks. We don't really think about the bank of canada. The central bank. That's responsible for our banknotes but we think about commercial banks the big six banks in canada your royal bank scotiabank et cetera. So this concept would be radically different. Because in effect it would be the bank of canada resting back a little. Bit of control over Over currency in the country and it would it would be this big evolution or revolution in finance in our country. because i think it would actually Allow for your average canadian more access or more interaction with a digitised version of physical cash. And we can get into how that is in in a second but certainly it's kind of a scary prospect for commercial banks. What would that look like if the bank of canada decided to do that. And i guess. I'm trying to understand it a bit more deeply but also you know. Do they have people designing this digital looney Would there be a picture attached to it. I know him asking dumb questions.

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