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(Kitco News) - Canada has become the latest country to advance the exploration of a central bank digital currency (CBDC) as the Bank of Canada (BOC) has launched an online public consultation seeking feedback on what features a digital Canadian dollar should possess.
“The way Canadians pay for everything from the daily necessities to major purchases is evolving rapidly,” the BOC wrote in a press release announcing the consultation period. “As the world becomes increasingly digital, the Bank – like many other central banks – is exploring a digital version of Canada’s national currency.”
The BOC went on to note that a digital Canadian dollar is not needed at this time but that the government wants to be prepared to create one when it is needed and wants to have the buy-in of the public before the matter comes up for a vote in Parliament.
“As Canada’s central bank, we want to make sure everyone can always take part in our country’s economy,” said Senior Deputy Governor Carolyn Rogers. “That means being ready for whatever the future holds.”
The consultation period officially opened on Monday and will run until June 19.
The BOC is looking to create a digital Canadian dollar that is designed to serve the needs of Canadians, so gaining feedback from the public is an important part of helping the bank understand which features they care about most.
Along with which features to include, the BOC is also trying to glean further insight into how people are likely to use the digital currency, what security features are important, and what concerns people have regarding accessibility and privacy.
“We want to hear from Canadians about what they value most in the design of a digital dollar,” Rogers said. “This will help us make design choices and ensure that it is secure, reliable and meets the needs of Canadians.”
The BOC stressed that it understands the importance of physical cash to Canadians, which they called “a safe, accessible and trusted method of payment that anyone can use, including people who don’t have a bank account, a credit score, or official identification documents.”
“If a digital Canadian dollar is issued in the future, the Bank will continue to provide banknotes for those who want them,” the BOC wrote. “Cash isn’t going anywhere.”
That being said, the BOC indicated that there may come a time when the demand for the day-to-day use of banknotes diminishes significantly, which they warned could risk excluding many Canadians from taking part in the economy.
There is also the threat of a private cryptocurrency or CBDC issued by another country becoming widely used in Canada, which could “compromise the role of an official, centrally issued currency – the Canadian dollar – in our economy and pose a risk to the stability of our financial system.”
For these reasons, the BOC is exploring the creation of a digital Canadian dollar to help ensure that Canadians “always have an official, safe, and stable digital payment option issued by Canada’s central bank.”
