Central Bank Digital Currencies are becoming increasingly commonplace nowadays, and many countries have already begun the process of CBDC implementation. While there are now numerous nations that have already adopted or are at least considering the possibility of adopting CBDCs, Canada remains hesitant, with the country’s central bank just not seeing any kind of strong and viable case for it and so has no plans of working on a digital currency as of this point in time.
Various countries all over the world, including but not limited to China, The Bahamas, Sweden, France, and Indonesia, have all previously expressed interest in pursuing CBDCs for their own respective nations. This occurs during a time when interest in the cryptocurrency and blockchain industry is at an all-time high, and numerous governments and regulatory authorities have now become aware of the need for a digitalized form of official currency as the world moves ever close to total digitalization and becomes increasingly cashless.
‘No strong reason to pursue CBDC,’ according to central bank
Simply put, Canada’s Central Bank does not see any viable reason as to why efforts towards implementing a potential CBDC for the country should be pursued right now.
To this end, the bank’s deputy governor, Timothy Lane, who is also the head of research for the cryptocurrency and fintech department at the same bank, had offered his thoughts on the issues pertaining to central bank digital currencies during a panel this past Wednesday. As per his statement, although the bank is looking into how a potential CBDC for the country could work as well as what the various pros and cons associated with making such a decision would be, he nevertheless reiterated that the bank has yet to find any kind of solid ground upon which the argument could be made to actively pursue such an endeavor right now.
Canadian digital currency could be ‘risky’
In addition to the aforementioned information, the bank had also highlighted a few key risks that were associated with the possibility of issuing a CBDC. Back in October of last year, special attention had been directed towards threats that may arise from storage issues resulting from CBDCs, as well as the competition that could be violently increased and subsequently escalated between the banks and various cryptocurrency exchanges prevalent in the country.
Furthermore, it had been towards the end of 2020 when Timothy Lane had initially suggested that Canada could eventually be forced to adopt CBDCs regardless of how it felt about central bank digital currencies, as this was also the time when the Covid-19 pandemic had drastically altered the socio-economic stability of the country.