The Bank of Canada has launched an online public consultation to gather opinions on the features that could be included in a digital Canadian dollar or central bank digital currency (CBDC).
Representative Image/Photo by Arthur Mazi/ Unsplash
The consultation, which runs until June 19, aims to understand Canadians’ needs and preferences regarding a digital version of the national currency.
According to the Bank of Canada, a digital Canadian dollar would function as a digital form of cash, enabling people to make online purchases and transfer money between family and friends, while providing the benefits of safety, accessibility, and privacy that cash offers. However, a digital Canadian dollar would not replace bank notes, and the decision to issue one rests with Parliament and the Government of Canada.
The central bank digital currency is also different from cryptocurrencies, such as Bitcoin, which are subject to rapid changes in value and often have expensive transaction fees and limited recourse. By contrast, it would be backed by the central bank, in the same way as cash, and would always hold the same value as a bank note. “$10 in digital Canadian dollars would always have the same value as a $10 bank note,” reads the website. The goal is to create a fast and low-cost digital currency that is as easy to use as cash.
The Bank of Canada says it researching a digital Canadian dollar to ensure that everyone has access to the economy and to prepare for the future. The use of cash is declining as digital payments become more widespread, but many people still rely on cash, including those without bank accounts, credit scores, or official identification documents.
If cash is no longer accepted in day-to-day transactions, many Canadians may be excluded from the economy. A digital Canadian dollar could complement cash and provide an official, safe, and stable digital payment option. Additionally, a digital Canadian dollar could protect the Canadian economy from the potential use of foreign cryptocurrencies or central bank digital currencies, which could compromise the central role of the Canadian dollar and destabilize the financial system.
Through the consultation, the Bank of Canada aims to create a digital Canadian dollar that serves Canadians’ needs and preferences. The online consultation seeks to gather opinions on topics such as how people would use a digital Canadian dollar, what security features are important, and what concerns people have about accessibility and privacy. The Bank plans to use this information to inform policy and design decisions and to publish a report summarizing the consultation later this year.