Canada drops plans to issue its own CBDC
The Bank of Canada says it is in no rush to develop its own digital currency, dubbed the Digital Loonie.
The bank says it will focus on the continued evolution of digital payments. For several years, Canada has explored the possibility of launching its CBDC. The Central Bank of Canada has decided not to move forward with the development of its digital currency, known as the digital Loonie, after several years of exploration that began in 2017. This decision comes in a context of rapid digitalization and changes in the ways Canadians pay, and follows a public consultation process in 2022.
The bank confirmed the information to the local press, stating that it has conducted “significant research to understand the implications of a central bank retail digital currency, including exploring the implications of a digital dollar on the economy and financial system, and technological approaches to providing a digital form of public money that is safe and accessible.” Instead of launching a CBDC, the central bank will focus on preparing for the evolution of digital payments both in Canada and globally, through research and policy analysis. This decision aligns with Canadians’ growing distrust of their government regarding the issuance of a CBDC. As reported by CriptoNoticias, 9 out of 10 Canadians distrust their government for such an issuance.
Canada's decision reflects global concerns about privacy. CBDCs, when issued by central banks, could allow for an unprecedented level of monitoring and control over citizens' financial transactions.