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The Bank of Canada is ending its work on a central bank digital currency for retail (CBDC), according to an update on its website. The announcement did not mention CBDCs for wholesale, but stressed that research is ongoing.
The Bank of Canada has conducted extensive research on CBDCs and is now shifting its focus from CBDC research to more pressing issues.
Does the Bank of Canada have more important things to do?
The Bank of Canada's view on CBDCs is that a contingency plan is needed if it becomes necessary. The current shift in focus comes as the bank prepares for new responsibilities. The Bank of Canada stated:
"With other payment issues becoming prominent, the bank is scaling back its work on central bank digital currencies for retail and shifting its focus to broader payment systems research and policy development."
In particular, Payments Canada, the association that operates the country's payment and settlement system, continues to develop its Real-time Rail instant payment system geared towards retail. The association has over 100 members, including Bank of Canada.
Furthermore, the Bank of Canada is set to closely monitor retail payments operations under the Retail Payments Operations Act 2021. This Act mandates that the central bank begin registering 2,500 small payments service providers previously only subject to anti-money laundering regulations by November and enforce operational risk standards by 2025.
The Bank of Canada reviews its reports.
Bank of Canada conducted research on CBDCs in conjunction with the Bank for International Settlements and Media Labs' Digital Currency Initiative at the Massachusetts Institute of Technology.
Source: Canada Proud
Research from banks at all levels, from the top to the streets, suggests that the Canadian public has little interest in CBDCs, and that this new form of money will create new limitations for the financial system and the public.
Despite changing priorities, the bank said research on CBDCs “would be incredibly valuable if, at some point in the future, Canadians, through their elected representatives, decide they want or need a Canadian digital dollar.”
