The central bank of Canada said the global health crisis had hastened the urgency of the development of its state-backed digital currency, which could now come sooner than previously envisaged. However, the bank was keen to point out that it was not yet a “foregone conclusion” that a CBDC would be issued. As reported by Reuters, Bank of Canada Deputy Governor Tim Lane said that the bank was analyzing the circumstances that might see it launch a digital currency.
The pandemic could force a sooner CBDC launch.
The deputy governor said, “For many years, the Bank of Canada has been analyzing which circumstances might lead them to decide to issue a digital currency. The ongoing global pandemic may bring us to a decision point sooner than we had anticipated…A digital currency is by no means a foregone conclusion.” Noting the progress being made in other countries, including China, towards a CBDC, Lane said he could see a scenario where a foreign central bank digital currency could come to be used in Canada. According to the deputy commissioner, foreign central bank digital currency could also come to be used in Canada.
China leads the race of issuing a CBDC.
Central banks around the world are exploring digital currencies, and many smaller economies have already issued central bank-backed digital currencies. China has already trialed its digital yuan in many cities and continues to do so. The People’s Bank of China has been working on its national digital currency for over five to six years and is now close to issuing it to the general public. Several other countries have also been experiment with digital currencies. As reported earlier, India is also planning to ban all cryptocurrencies and issue a framework for its national digital currency.