Could bitcoin reinvigorate Canada's creaking payment system? A prestigious Canadian economics institute has released a report suggesting that bitcoin could become a "common currency" and reduce payment costs, if only regulators would provide clarity. It unveiled the report just as the Canadian government declared that bitcoin wasn't legal tender.
Bitcoin's big advantage is its inexpensive payment system, said David Descôteaux, the report's author. This enables people to send payments to people relatively cheaply, the document said - especially overseas.
But could bitcoin also be a useful alternative to payment systems in Canada? A 2011 report from a Government-commissioned Task Force, called Moving Canada in the Digital Age, suggested that Canada lagged far behind in its payments systems.
"Unless Canada develops a modern digital payments system, Canadians will be unable to fully engage in the digital economy of the 21st century," said the report, adding that the country lagged behind "Twenty-seven European Union countries, the BRIC countries‚ even Peru and Romania" in its digital payments innovations.
Canada does have a money-by-email system called Interac, but it isn't instantaneous, and the country still lags in mobile payment mechanisms, the three year-old report warned.
The MEI report - really little more than a primer on bitcoin - was released last week, shortly before a Canadian government official reportedly said that the authorities there did not consider bitcoin to be legal tender.
This didn't faze Descôteaux, though, who pointed out that the Canada Revenue Agency had already issued guidance classifying bitcoin as a form of physical good, rather than as money.
The Institute will publish a more in-depth report exploring the regulatory landscape for bitcoin in April.
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