The Bank of Canada has announced that it is winding down its efforts on retail central bank digital currency (CBDC), as per an update on its website.
While there was no mention of wholesale CBDC, the bank emphasized that research in this area would continue.
Having conducted significant research on CBDCs, the Bank of Canada is now shifting its attention to more immediate concerns. Previously, the bank maintained that a “contingency plan” for CBDC was necessary in case the need arose, but this change in focus comes as the institution prepares to take on new responsibilities.
With other payment issues taking precedence, the bank is scaling back its retail CBDC work and shifting its resources to broader payment system research and policy development. Meanwhile, Payments Canada, the body responsible for the country’s clearing and settlement systems, is continuing its work on the Real-time Rail instant payment system. This system aims to provide faster payment solutions, with over 100 members involved, including the Bank of Canada itself.
The central bank is also gearing up to oversee retail payments under the Retail Payment Activities Act of 2021. This includes registering around 2,500 small payment service providers by November and implementing operational risk standards by 2025.
In collaboration with the Bank for International Settlements and MIT’s Digital Currency Initiative, the Bank of Canada’s research on CBDCs explored various levels of public engagement. Findings showed that there was little public interest in a CBDC, and it could pose new challenges for the financial system. Despite the shift in priorities, the bank noted that its CBDC research would be valuable should Canadians, through their elected officials, decide a digital Canadian dollar is needed in the future.
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