According to a report by Kyle Bakx and Meegan for CBC News, the Bank of Canada has paused its efforts to introduce a digital version of the Canadian dollar.
After years of research, the central bank has decided to step back from the idea, focusing instead on broader developments in payment systems both within Canada and globally.
Per the CBC report, the central bank began exploring the concept of a digital currency in 2017 in response to the rapid rise of digital payments and the decreasing use of cash. Public consultations were held in 2022 to assess interest, and in 2024, the central bank released a staff discussion paper (title: “The Role of Public Money in the Digital Age”) outlining reasons why a digital currency might be necessary to maintain monetary control and stability in a world increasingly driven by technology.
Despite the groundwork, the Bank of Canada has shifted its priorities. The CBC says that the bank explained in a statement sent via email that it had conducted extensive research into the potential impacts of a digital currency on the economy and financial systems. The study also examined the technological requirements for creating a secure and accessible digital form of public money. However, rather than moving forward with a digital Canadian dollar at this time, the bank’s focus will shift toward preparing for ongoing changes in the global and domestic payments landscape.
While many nations are exploring central bank digital currencies (CBDCs), only a few, including the Bahamas, Jamaica, and Nigeria, have fully launched their own.
Karl Schamotta, Chief Market Strategist at Corpay, told CBC that while cryptocurrencies have prompted a wave of financial innovation, there is little immediate need for a digital Loonie. Schamotta suggested that the central bank is likely prioritizing the proven security and reliability of the existing monetary system for the time being.
Featured Image via Unsplash