Definition

Digital Currency

One of the latest waves of the digital economy is virtual currency or cryptocurrency. Virtual/cryptocurrency is a digital asset that can be used to buy goods or services, usually online. Unlike national currencies like the Canadian dollar, cryptocurrencies like Bitcoin or Facebook's planned Libra are not controlled by central banks or governments. (See also Monetary Policy.) Cryptocurrencies can be used more anonymously th a credit card or e-transfer of cash.

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One of the latest waves of the digital economy is virtual currency or cryptocurrency. Virtual/cryptocurrency is a digital asset that can be used to buy goods or services, usually online. Unlike national currencies like the Canadian dollar, cryptocurrencies like Bitcoin or Facebook's planned Libra are not controlled by central banks or governments. (See also Monetary Policy.) Cryptocurrencies can be used more anonymously than a credit card or e-transfer of cash.

If a significant chunk of the overall economy shifts from using national currencies to virtual and cryptocurrencies, governments would lose control over that section of the economy. It could lead to a freer market, with currencies exchanging purely at market rate, or to volatile fluctuation, as no central authority oversees the valuation. Similarly, it could give people more anonymity online, which could make money laundering and black-market transactions easier to conduct. (See also

Computers and Canadian Society: Dark Web.)

Challenges and Opportunities

Canada is one of the world's m.ost digitally connected economies. The vast majority of Canadian workers use the Internet every day. As highspeed connections reach out to more rural areas, the impact will grow. The digital economy brings new opportunities, and new risks.

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