Bank of Canada sees no strong case for a digital dollar — for now

Amid the global CBDC race, the Canadian central bank does not currently see a strong case for issuing a state digital currency.

The Bank of Canada does not see a strong reason for issuing a central bank digital currency, or CBDC at the moment.

Timothy Lane, the Bank of Canada’s deputy governor and head of research at the bank’s fintech and crypto department, spoke on CBDC issues at a Wednesday panel, Reuters reports.

According to the official, the Canadian central bank is now focused on CBDC implementations in more concrete terms, thinking about how it might work and look. However, the Bank of Canada has not found any solid case for issuing a CBDC, Lane said:

“In terms of where we are with the project, we don’t currently see a strong case for issuing it, but the world is progressing very rapidly and probably even more so in the wake of the pandemic.”

Not only does the Bank of Canada not see a solid case for issuing a CBDC but also it has outlined a number of risks related to a state digital currency previously. In October 2020, the bank issued a report on CBDC-associated risks, paying special attention to threats arising from CBDC storage issues and competition between crypto exchanges and banks in terms of attracting users.

Last December, Lane said that the global coronavirus pandemic could force Canada to launch a CBDC sooner than originally expected. “I would say that in the last nine months we’ve seen developments that look like they’re in the direction of some of those things coming to pass sooner than expected,” he said in late 2020.