Canada could launch its own digital currency after the central bank launched a consultation about ideas for a digital Canadian dollar.
In a statement, the Bank of Canada said the consultation reflected how fast payment methods were developing and the rapid move to online and digital services.
Falling use of physical cash could risk excluding some Canadians from society, the bank said, while the rise of other cryptocurrencies — including other central bank digital currencies (CBDCs) — could “compromise” traditional currencies and pose a risk to economic stability.
“A digital Canadian dollar would ensure Canadians always have an official, safe, and stable digital payment option issued by Canada’s central bank,” the bank stated.
However, it also emphasized that a digital dollar was not essential, and would only be implemented if approved by parliament and government.
“As Canada’s central bank, we want to make sure everyone can always take part in our country’s economy. That means being ready for whatever the future holds,” said senior deputy governor Carolyn Rogers.
“We want to hear from Canadians about what they value most in the design of a digital dollar. This will help us make design choices and ensure that it is secure, reliable and meets the needs of Canadians.”
The bank is seeking feedback by June 19 on topics such as how a digital dollar could be used, what security features to consider, and any concerns about accessibility and privacy.
Other central banks — including the Federal Reserve in the US and the UK’s Bank of England — are also exploring the potential uses of CBDCs. However, the topic has polarized views with some experts warning that such assets could destabilize the financial system.
In 2021, the Digital Dollar Project, a non-profit organization, launched a series of research programs exploring the design and uses of CBDCs for the US economy. Earlier this year, the Bank for International Settlements suggested that CBDCs could help restore faith in crypto markets in the wake of high-profile failures such as FTX.