Canada Moves Away From Retail CBDC, Shifts Focus to Broader Payments

Canada is shifting its focus away from a retail central bank digital currency after years of research, its central bank announced last week.

“With this work completed, and with other payments issues gaining prominence, 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,” a document vaguely titled “Digital Canadian Dollar” said.

CBC News, Canada’s public broadcaster, reported that “The Bank of Canada confirmed” it has “shifted its focus away from the idea of introducing a digital Canadian dollar.” The story also said the Bank “is shelving” the idea of a Canadian dollar.

It isn’t clear whether the bank’s official statement saying it was “scaling down” its retail CBDC work and “shifting its focus to broader payments” research means it has shelved the retail CBDC idea completely.

Particularly because the Bank also said it would “continue to monitor global retail CBDC developments and publish some related research,” there would “be further opportunities for Canadians to provide input on a potential digital dollar,” and that all the research done so far would be “invaluable if, at some point in the future, Canadians … decide they want or need a digital Canadian dollar.”

Canada’s latest position comes as the debate over CBDC’s became a presidential election issue in the U.S. despite the Federal Reserve’s Chair, Jerome Powell, saying it was nowhere near recommending – or let alone adopting – a CBDC in any form” and that “people don’t need to worry about it.”

But the Bank of Canada’s update does come less than three months after a staff discussion paper which said that cash is “likely to decline” in relevance going forward then a “properly designed CBDC would help fill the gap” and maintain the relevance of a retail public money in the economy.”

At the end of 2023, the Bank received almost 90,000 responses to a public consultation paper, with most reflecting privacy concerns.

Read More: Why We Won’t See CBDCs Everywhere