Tiffany Wang is an��IPilogue���°����ٱ��, IP Innovation Clinic Fellow,��and a 2L JD Candidate at��Osgoode��Hall Law School.��

��

The near ubiquity of Alipay in China and the Bank of Canada’s (BoC) of a Central Bank Digital Loonie (CBDL) foreshadow a future of digital currency. The U.S. dollar is also a form of digital currency managed by the Federal Reserve Bank. As of December 2019, . The United States Congress has already begun to contemplate “” proposals to protect the financial wellbeing of hardworking Americans. The ultimate vision is to help unbanked or underbanked individuals access financial services without having to . This way, Americans will have a direct account with the Federal Reserve.

Will digital dollars revolutionize financial services? Even if digital currency increases , it raises fears of privacy intrusions. Digital transactions leave footprints. Chinese officials, acknowledging the lack of privacy, expressed that the digital yuan will be subject to a “” that renders digital transactions anonymous to the participants but visible to the central bank. Digital trails may lead to a of consumer spending habits, which could lead to a true surveillance state.

With the BoC paving the path for the Digital Loonie, where does the future lie for the Canadian dollar? Researchers based at the University of Toronto and 91��ɫ believe that the future of money will be . Digital currency will facilitate investments and instantaneous transactions. The current pandemic has accelerated the digitalization of currency. Statistics Canada reports that e-commerce has compared to pre-pandemic statistics.

While fears of privacy intrusions still exist around digital currency, there is optimism that the central bank presents a more attractive solution than cryptocurrency. Cryptocurrency, unlike a digital currency managed by the BoC, is . The BoC seeks to tailor digital currency to address the threats of fraud.

Centralized currency, however, poses . The storage of immense amounts of personal and financial data in a centralized pool may result in . Moreover, third parties, such as law enforcement and surveillance agencies, may share and further personal data and transactions.

A feasible implementation of digital currency requires . Fears will likely succumb to convenience as the use of cash decreases and e-commerce becomes the norm. Canadians’ decreased use of cash during the pandemic demonstrates that to other factors, such as privacy. Digital currencies bring new opportunities for consumers to take advantage of efficient payment solutions. As the world treads the path toward global digitalization of assets, investments, and commerce, the creation of a Canadian fedcoin may become inevitable.

The post Fedcoin?: Digital Currency and Privacy appeared first on IPOsgoode.

In an from Wired Magazine, RCM’s Chief Financial Officer Marc Brule defends MintChip as a novel path in the realm of digital currency. The exact path has not be thoroughly defined, as the RCM is still in the early stages of research and development. Instead, they have issued a Developer Challenge to the public in order to gather new ideas and directions (a video of the challenge can be seen ). However, stated within the rules of the Developer Challenge – any submission must be the original work of the developer, and cannot violate any intellectual property, proprietary, privacy, or moral rights or another person/entity (for the complete rules click ). And this is where the question arises of whether such a submission would be copying the idea of Bitcoin.

Firstly, the two concepts differ in how transactions are controlled. The driving force behind Bitcoin, , was to create a form of money that was “convenient and untraceable, liberated from the oversight of governments and banks.” The creator, Satoshi Nakamoto, ensured that bitcoins would remain decentralized and out of government (or third-party) control by publicly distributing a real-time ledger of all transactions called a ‘block chain’. The public distribution ensured that all transactions were broadcasted to the network of bitcoin users to ensure legitimacy and prevent duplicate transactions. It was very clear that Nakamoto intended bitcoin to be an alternate form of currency – one that co-existed as a more attractive alternative than printed currency. On the other hand, the RCM’s intention is to create a centralized system of digital currency. In fact, the purpose of MintChip is not an alternative to printed dollars, but a substitute – Brule was quoted by saying, “MintChip could be the digital equivalent for cash for online transactions.”

Secondly, the concepts differ in how currency is made. The Bitcoin economy relies on the network of its users’ computers. The release of bitcoins is predetermined – an algorithm releases new bitcoins into the network at preset intervals to ensure that the monetary supply grows proportionately with the number of users. Around the year 2140, the currency would reach its prescribed limit of 21 million bitcoins. Though Brule did not comment specifically on the creation of new currency, the system appears to retain the status quo – in which the Bank of Canada would be responsible for maintaining the monetary supply. Therefore, both the control and creation of currency differs.

It is, however, possible to argue that the bottom line is the creation of a digital currency. Each system intends to bypass a printed form and utilize a system of currency in digital form that would be used to purchase and sell goods and services. Though the bitcoin concept is a community-driven open source project, problems would arise governing the intellectual property rights. In reviewing the MIT License, permission is granted free of charge to any person obtaining a copy of bitcoin and its associated files to deal in the software without restriction or limitation with the condition that all subsequent copies of the software must contain the Open Source Initiative. This would run contrary to the rules in the MintChip Developer Challenge, whereby it states that any submission will forfeit all intellectual property rights to the RCM in perpetuity. The challenge would lie in determining whether the software submitted had copied the bitcoin system in any meaningful fashion.

However, there is a further complication. The problem lies in the creator of the bitcoin system itself - Satoshi Nakamoto. Since April 2011, he had claimed he had "moved on to other things", and has not been heard since. All other attempts of ascertaining his identity through his posts in forums, email addresses, and website have failed (more on the identification of Nakamoto ). And while his legacy continues with the use of the currency, his identity remains a mystery.

Despite its infancy, I believe MintChip possesses fundamental differences from bitcoin - differences that mean it is unlikely to infringe upon the Open Source Initiative's intellectual property rights. However, because of its infancy, it remains difficult to predict its outcome, and should be closely followed as it develops.

Byron Tse is a JD Candidate at the Western University Faculty of Law.

The post Who Coined It First? The Advent of Digital Currency appeared first on IPOsgoode.