Last week a Canadian radio broadcaster CBC stated the Bank of Canada was winding down its work on a retail central bank digital currency (CBDC), saying it has ‘shelved’ the idea. Now the Governor of the Bank of Canada confirmed the research work is coming to an end. However, he didn’t say never.
In a speech yesterday, Governor Tiff Macklem said, “In the past few years we’ve built an extensive body of knowledge about the framework and technology behind a possible central bank digital currency (CBDC), including the benefits and risks.”
“But recognizing that there is not currently a compelling case to move forward with a CBDC in Canada, 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. The Bank will continue to monitor global retail CBDC developments. And the Bank will be ready to ensure Canadians always have a safe and secure supply of public money.”
This stance isn’t substantially different from the early days of the research work when it said that Canadian payment needs were already well met. In 2020 it outlined scenarios for a possible CBDC launch that mainly related to threats to monetary sovereignty. The United States is unlikely to launch a retail CBDC any time soon, if ever. So the other digital currency potential threat could be a US dollar stablecoin.
Bookending its research period, a July 2024 paper made similar observations, adding the risk of fragmentation from private payment systems that become dominant. In the meantime, the central bank has published several thoughtful reports.
In late 2023 it released the result of a public consultation showing Canadian citizens oppose the idea of a retail CBDC.