Bank of Canada

The Bank of Canada is Canada's central bank, created by the Bank of Canada Act of 1934 and operating since 1935. It issues the Canadian dollar, sets the policy interest rate, and has targeted 2 percent inflation under an agreement with the federal government since 1991, one of the earliest formal inflation-targeting regimes in the world.

Why it matters

The Bank of Canada is often a bellwether among major central banks: it was among the first to adopt inflation targeting, and in 2020 it launched quantitative easing for the first time, buying government bonds at scale during the pandemic. Its decisions move mortgage rates and the currency of a G7 economy, and its research on central bank digital currencies has been unusually candid about both benefits and risks.

For monetary historians, its most striking act was divestment: Canada sold off essentially all of its official gold reserves, a process completed in 2016, making it the only G7 nation holding effectively no gold.

In the gold vs bitcoin debate

Canada offers a natural experiment in trusting fiat management completely. Gold advocates point out the irony of a resource-rich, gold-producing nation selling its reserves near multi-decade lows while other central banks became record buyers in the 2020s. Bitcoin advocates note a different Canadian first: the Toronto Stock Exchange listed the world's first spot bitcoin ETF in February 2021, years before the United States allowed one. One country, two very different bets on the future of money.