The Bank of Canada currently sees no strong reason for issuing a central bank digital currency, or CBDC.
According to Reuters, Timothy Lane, deputy governor of the Bank of Canada and head of research for the bank’s fintech and crypto division, spoke on a Wednesday panel on CBDC issues.
According to the official, Canada’s central bank is now focusing more specifically on CBDC implementations and considering how it could work and look. However, the Bank of Canada has not found solid reasons for granting a CBDC, Lane said:
“In terms of where we are with the project, we don’t see a strong argument in favor of releasing the project right now, but the world is moving very quickly and probably even more with the pandemic.”
Not only does the Bank of Canada fail to see a solid argument in favor of issuing a CBDC, it has also previously identified a number of risks associated with a government digital currency. In October 2020, the bank released a report on CBDC Risks, paying special attention to the threats posed by CBDC storage issues and competition between crypto exchanges and banks for user acquisition.
Last December, Lane said the global coronavirus pandemic could force Canada to start a CBDC earlier than originally expected. “I would say that in the past nine months we have seen developments that look like they are heading in the direction of some of these things that are happening earlier than expected,” he said in late 2020.