Bank of Canada: “not yet” time for CBDC

Canadians are well-served by the existing payment ecosystem, so the Bank of Canada does not believe there is a need to issue its own digital currency at this time. But the world can change very quickly, so the central bank is considering the future, said deputy governor Timothy Lane in a recent speech.

“We have concluded that there is not a compelling case to issue a CBDC at this time. Canadians will continue to be well-served by the existing payment ecosystem, provided it is modernized and remains fit for purpose,'” said Lane in the speech.

This means that: bank notes remain available to Canadians who want to use them, including marginalized populations in our society; the Canadian payment system is brought up to date and problems with cross-border payments are addressed; and an appropriate regulatory framework for stablecoins and other private digital currencies is established, both in Canada and globally.

Two scenarios could warrant an introduction of a digital currency: if the use of physical cash is reduced or eliminated altogether, leaving some Canadians left out; and if private cryptocurrencies make serious inroads, creating concerns about privacy and handing control of payments to private companies.

The Bank of Canada collaborated with the Bank of England and the Monetary Authority of Singapore to identify the “pain points” in cross-border payments. Work on this topic is continuing through domestic and international forums, including the G20.

Read the full speech

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