The Bank of Canada is winding down its work on retail central bank digital currency (CBDC), according to an update to the central bank’s website. The announcement did not mention wholesale CBDC, but it emphasized that its research was continuing.
The Bank of Canada has done extensive research on CBDC and is now shifting its focus from CBDC research to other more pressing issues.
The Bank of Canada has better things to do?
The Bank of Canada’s position on CBDC was that it needed a “contingency plan” in case it became necessary. The current shift in focus comes as the bank prepares for new responsibilities. The Bank of Canada said:
“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.”
Notably, Payments Canada, the association that operates the country’s payment clearing and settlement system, is continuing to develop the retail-oriented Real-time Rail instant payment system. The association has over 100 members, including the Bank of Canada.
In addition, the Bank of Canada is about to step up supervision of retail payments under the Retail Payment Activities Act of 2021. The act mandates that the central bank begin registering 2,500 small payment service providers that previously were only subject to Anti-Money Laundering provisions in November and enforcing operational risk standards in 2025.
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The Bank of Canada reads its own reports
The Bank of Canada has engaged in CBDC research in conjunction with the Bank for International Settlements and the Massachusetts Institute of Technology Media Labs’ Digital Currency Initiative.
Source: Canada Proud
The bank’s own research ranged from high-level to street-level. The bank found repeatedly that the Canadian public had little interest in a CBDC and the new form of money would have new drawbacks for the financial system and the public.
Despite its changing priorities, the bank said its CBDC research “will be invaluable if, at some point in the future, Canadians, through their elected representatives, decide they want or need a digital Canadian dollar.”
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