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The Bank of Canada wants to know what features Canadians want in a potential digital dollar, even as it maintains that the country doesn’t need a central bank digital currency (CBDC) for now.
The top bank announced this week that it had launched an online public consultation on the digital dollar, which runs until June 19.
📣Hey Canada, we need your input!
Our public consultation on a potential #DigitalCanadianDollar is now LIVE. #HaveYourSay by June 19: https://t.co/p8BdG3tQ9h pic.twitter.com/vKRoBfAngu
— Bank of Canada (@bankofcanada) May 8, 2023
Canada’s payments system has continued to evolve over time, the central bank acknowledged. In recent years, payments have gone rapidly digital, and the use of physical Canadian dollar banknotes has declined. This makes exploring a CBDC important for the bank.
“As Canada’s central bank, we want to make sure everyone can always take part in our country’s economy. That means being ready for whatever the future holds,” commented the bank’s Deputy Governor, Carolyn Rogers.
Being ready to issue a digital dollar is important for two major reasons, the bank noted. The first is the decline of cash payments which in the future could exclude some Canadians from the payments system.
The bank is also concerned that digital currencies could shoot to prominence in Canada and erode the position held by the Canadian dollar. It says this could “pose a risk to the stability of our financial system.” Other countries are exploring CBDCs, and if they were to become popular in Canada, the country’s monetary sovereignty would come under threat.
“A digital Canadian dollar would ensure Canadians always have an official, safe, and stable digital payment option issued by Canada’s central bank,” the press release read.
The digital dollar has its fair share of critics. The Canadian Bankers Association expressed concerns last December that the CBDC could lead to bank disintermediation.
Pierre Poilievre, the leader of the country’s official opposition, has also been a vocal critic of the digital dollar. He argues that a CBDC would deny Canadians economic liberty.
“A Poilievre government will ban a central bank digital currency and allow Canadians to have the economic and financial liberty that they deserve,” said the politician who became the opposition leader last September.
For now, the Bank of Canada just wants public feedback on the features they want in a digital dollar.
“We want to hear from Canadians about what they value most in the design of a digital dollar. This will help us make design choices and ensure that it is secure, reliable and meets the needs of Canadians,” Rogers said.
The bank has yet to commit to developing the digital dollar, and such a decision “rests with Parliament and the Government of Canada.”
To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.
Watch: Blockchain provides perfect foundation for CBDC
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