The parties revealed the development in a panel discussion at the Payments Panorama conference this week in Calgary, Alberta.
According to the slide, the system is called “The Jasper Distributed Ledger Settlement Platform.”
The cycle of the platform is as follows:
- Participants pledge T1 cash collateral into a special pooled account held by Bank of Canada (BoC), the country’s central bank;
- BoC converts cash collateral to generate CAD-COIN;
- BoC transfers CAD-COIN to fund participants’ accounts;
- Identifiable, trusted counterparties exchange assets on the CAD-COIN platform;
- Participants redeem CAD-COIN for T1 cash collateral; and
- BoC destroys redeemed CAD-COIN
The slide also lists the following design assumptions:
- Network participants (FIs) each set up a digital currency account as part of a CAD-COIN asset registry
- The CAD-COIN asset registry is owned by the BoC; the digital funds belong to the FI
- BoC issues depository receipts, not tokens
- The CAD-COIN-shared ledger reflects real-time accurate account balances for each digital currency account
- All network participants are trusted and authorized to perform transactions
Sources stressed to Forbes the BoC and Payments Canada do not currently have plans to issue a digital fiat currency. They told the magazine that Carolyn Wilkins, the central bank’s senior deputy governor, will disclose more details about the experiment in a speech tomorrow at Payments Panorama.
Forbes reported the experiment is being conducted by financial innovation firm R3 CEV, whose members include each of those banks. Kemper told the magazine the panelists demonstrated the use of CAD-COIN, showing how funds can be transferred using Ethereum.
“The central bank is really innovating here, but it’s innovating in cahoots with the largest banks in Canada first as a project but ultimately this can be the CAD-COIN,” Kemper said, noting this was the first step in the “blockchain-ification” of banks.
Photo of Carolyn Wilkins – Her profile on Bank of Canada’s website