According to CBC News Bank of Canadahas decided to suspend its central bank digital currency (CBDC) plans, which it began seven years ago. The decision has not been officially confirmed.
Digital Loonie Project Takes a Step Back
According to reports, the Bank of Canada said, “Digital Loonie“ appears less willing to pursue the so-called digital currency. However, the bank has not made an official statement that it has stopped research into CBDC.
However, a bank spokesperson told CBC News that the bank has “conducted significant research on the implications of retail central bank digital money.” The report said the bank is focusing its efforts on Canada and analyzed the trends in payment systems around the world.
Global CBDC Studies
This step Atlantic Council follows the data of the think tank. According to this data, 134 countries representing 98 percent of the global economy are actively researching digital currencies, and 44 of them are actively conducting CBDC pilot projects. Canada’s decision, digital money shows that he is taking a different path in his race.
This week, a similar development came from the Reserve Bank of Australia. The bank decided to abandon the idea of a retail CBDC and instead focus on a wholesale CBDC. The bank stated that a retail CBDC presents “non-trivial challenges” to financial stability and monetary policy implementation. On the other hand, it believes that a wholesale CBDC “would represent an evolution in monetary regulation.”
Political Reactions in Canada
Last month, the Leader of the Conservative Party of Canada Pierre Poilievrehas come out strongly against the development of a central bank digital currency in the country. He has vowed to protect the use of cash and reject government pressure to digitize the economy. “We will protect Canadians’ right to use cash and oppose mandatory digital currency,” Pierre Poilievre said.
Also, Member of the Canadian Parliament Ted FalkHe expressed support for Bill C-400, which aims to ban the implementation of this type of currency.
The Bank of Canada’s decision to abandon its CBDC plans is a notable move, despite global digital currency trends. The bank may be choosing to take a more cautious approach when assessing the potential risks and benefits of digital currencies. On the other hand, it is conceivable that Canada may seek alternative ways to strengthen and modernize its payment systems infrastructure. This suggests that Canada is pursuing a careful and measured strategy in adopting digital payment systems.
Disclaimer: The information contained in this article does not contain investment advice. Investors should be aware that cryptocurrencies carry high volatility and therefore risk, and should carry out their transactions in line with their own research.
