Canada appears to have toned down its retail central bank digital currency (CBDC) efforts. This follows after the country’s apex bank recently shared an announcement following years of research and study that went with the CBDC idea.
Per the bank, rising payment issues mean that there are other things to look into, that are a matter of more urgency than the CBDC project.
Meanwhile, it might be worth noting that, though Canada now has changed priorities, its central bank has not confirmed that it will no longer pursue anything CBDC-related. A section of a document titled “Digital Canadian Dollar” reads:
“With this work completed, and with other payments issues gaining prominence, the Bank is scaling down its work on a retail central bank digital currency and shifting its focus to broader payments system research and policy development.”
This story appears to have also been corroborated by CBC News, Canada’s public broadcaster. The media outlet reported that The Bank of Canada “confirmed” the move, claiming it has “shifted its focus away from the idea of introducing a digital Canadian dollar.” However, further down the line, the story also claimed that the Bank “is shelving” the idea.
Canada Retail CBDC: Pending or Discarded?
At the moment, there is a confusion as to the implication of the bank’s official statement. That is because it is not exactly clear whether it is dropping the entire idea of a digital Canadian dollar, or merely putting it on hold for now.
Adding further fuel to the confusion is another statement by the bank where it said it would continue to keep an eye on CBDC developments round the globe. The Bank of Canada also noted that Canadians may still have the opportunity to provide valuable inputs on a potential digital dollar. On its own part, however, it hopes that it is able to continue to publish some CBDC-related research. Particularly, if Canadians continue to show interest.
Canada may have explained the reason behind its decision to backtrack on its CBDC ambition. However, it is worth noting that the country’s new position is coming at a time when a recent report showed that nearly 98% of the world economy is currently exploring CBDCs.
Meanwhile, less than three months ago, the Bank of Canada published a discussion paper claiming that cash is fast losing its relevance. In that paper, the bank even recommended that a properly developed CBDC would make up for the gap.
Now, however, tables seem to have turned and Canada no longer seeks to work on the retail CBDC as it once did aggressively.
Notably, the Bank of Canada put out a public consultation paper in 2023. By the end of the year, it received nearly 90,000 responses, with a large majority hammering on privacy concerns.
