Timothy Lane, the deputy Governor of the Bank of Canada and Research Head of the bank’s fintech and cryptocurrencies department, said that the central bank has seen developments in the plans regarding the launch of a central bank digital currency (CBDC). He added that the bank might go ahead with a sooner than expected launch of a national digital currency. The recent statement by the deputy governor indicates a change in tone regarding CBDC.
The global pandemic has significantly reduced the use of cash.
The bank’s governing council member outlined that the ongoing global pandemic has significantly reduced cash use. The bank is also frequently conducting surveys on payment behavior to keep up with the developments regarding evolving payment trends. Earlier in February this year, Lane said that “there is not a compelling case to issue a CBDC at this time.”
During a conversation at the center for international governance innovation, the deputy governor said that they identified two scenarios that we would want to be prepared for. One of the scenarios was the disappearance of the acceptance of cash, and the second was the emergence of cryptocurrencies that might turn out to be disruptive and might undermine Canada’s monetary sovereignty.
The Bank of Canada might go ahead with the digital currency plans in the coming years.
Canada’s central bank has always maintained ‘no urgency’ regarding a digital currency’s issuance in the past. However, the recent comments show that the central bank might go ahead with the digital currency plans in the coming years. The deputy governor said that even if the Bank of Canada falls behind ECB and the Chinese Central Bank in the issuance of a CBDC, the bank can learn lessons from the early movers. The People’s Bank of China is all set to roll out the digital yuan.