Is a CBDC Coming to Canada? What You Need to Know

The Bank of Canada is exploring the possibility of a CBDC. They surveyed 85K Canadians and will publish a report later this year, which could include a date for a CBDC pilot program.

Updated: Jul 9, 2023

Canadas CBDC

Highlights

  • Right now, there is no launch date for a CBDC or a pilot program in Canada. However, the Bank of Canada is "exploring the possibility of using a digital form of the Canadian dollar, also known as a CBDC" according to its website.
  • In addition, the Bank of Canada ran a public survey from May 8 to June 19, 2023 where 85,000 Canadians shared their thoughts about a potential CBDC in Canada.
  • Currently, they are analyzing the data, which will shape the design process and possibility of a CBDC pilot program. A detailed report is expected to be released in 2023.

What Are CBDCs?

A Central Bank Digital Currency (CBDC) is a digital version of traditional money, like the Canadian dollar. It's backed by the central bank and holds the same value as the national currency. CBDCs are the opposite of decentralized cryptocurrencies like Bitcoin, as they allow central banks to maintain full control over the money supply.

Is A CBDC Coming To Canada?

While there is no official launch date or pilot program yet, the Bank of Canada has been exploring the possibility of a CBDC since 2013. In 2023, they ran a public consultation where 85,000 Canadians participated in a survey. They are currently in the process of analyzing the information. The data will shape the design process and possibility of an eventual CBDC launch.

When Is The CBDC Pilot Launch Date?

Currently, there is no launch date for a Central Bank Digital Currency in Canada. A report is expected to be released before the end of 2023, which will provide more insights about a potential Canadian digital dollar.

The Bank of Canada's Survey

From May 8 to June 19, 2023 the Bank of Canada conducted a public consultation to gather public opinion about a CBDC. The survey aimed to understand how people would use a digital currency, what security features are important to them, and any concerns they have about accessibility and privacy. 

More than 85,000 Canadians participated and the findings from this survey could effect policy and design decisions with Canada's CBDC initiative. The feedback is currently being analyzed by "researchers, technology specialists, and senior decision-makers." A report will be published in 2023.

How Will Canada's CBDC Work?

While there is limited information, here's what's available so far:

  • The decision to issue a Canadian digital dollar rests with the Parliament and the Government. 
  • The issuer of the CBDC will be the Bank of Canada.
  • It will have a 1:1 value to the Canadian Dollar.
  • The CBDC will work alongside traditional cash, complementing it rather than replacing it.
  • They claim that a CBDC will make digital payments easier and more efficient.
  • If Canada follows other countries, it will start with a pilot program.

Global CBDC Landscape

CBDC are evolving rapidly, giving Canada lots of examples to study. As of this writing, at least 11 countries like China, Nigeria, and the Bahamas have already rolled out a digital currency. Simultaneously, countries like Australia and Sweden are testing pilot programs. However, it's important to note that some states like North Carolina and Florida have taken a different approach by completely banning the use of CBDCs.

Conclusion

As crypto adoption in Canada is gaining momentum, the Bank of Canada is exploring the possibility of a CBDC. The Bank of Canada said they don't see an immediate need for a digital dollar. However, they recognize the importance of being prepared for the future and have been examining digital currencies as far back as 2013.

The decision to issue a CBDC will ultimately be determined by Parliament and the Government of Canada. I will try to update this article as new information comes out.

Canada's CBDC Timeline

  • May 8 to June 19, 2023: 85,000 Canadians participated in a CBDC survey form the Bank of Canada.
  • Later In 2023: The Bank of Canada will release a report based on the data collected.

Author

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