Canada has announced a significant pivot in its approach to central bank digital currencies (CBDCs), specifically stepping back from the development of a retail CBDC. The Bank of Canada has communicated that it is scaling back its focus on creating a digital Canadian dollar but remains open to reassessing this initiative if future public demand arises.
This change marks a notable shift after several years dedicated to researching the viability and implications of a digital Canadian dollar. In a recent report from CBC News, which serves as Canada's public broadcaster, it was confirmed that the Bank of Canada has decided to put the idea of a digital Canadian dollar on hold.
Instead, the central bank is now redirecting its resources towards extensive research on broader payment systems and related policy development. Despite this redirection, the Bank of Canada has assured the public that it will continue monitoring global trends in retail CBDCs and will publish relevant research findings.
Moreover, there will remain ample avenues for Canadians to voice their opinions regarding the prospect of a digital dollar. The Bank of Canada's updated stance comes at a time when CBDCs are a hot topic worldwide, particularly in the United States, where discussions around the subject have gained traction during the presidential election campaign.
Federal Reserve Chair Jerome Powell has commented that the United States is not nearing any recommendation or adoption of a CBDC, indicating that the public should not be concerned about any immediate implementation. This latest update from the Bank of Canada follows a staff discussion paper released less than three months prior, which noted a potential decrease in cash's relevance and proposed that a well-designed CBDC might aid in preserving the significance of retail public money within the economy.
As of late 2023, the Bank of Canada had received nearly 90,000 responses to its public consultation paper, many of which raised valid concerns about privacy..