Timothy Lane, deputy governor of the Bank of Canada and head of research in the bank’s financial technology and cryptocurrency division, said that lCanada’s digital currency central bank (CBDC) may see the light of day “sooner than expected”.
Lane commented on the Bank of Canada’s approach to digital payments in a Dec 1 interview.
According to Lane The expected decline in cash transactions due to COVID-19 came faster than the bank previously expected. This could result in the bank issuing a CBDC earlier than originally planned:
“In February we identified two scenarios that we want to be prepared for. One of them was the disappearance of cash acceptance and the second was the rise of digital currencies. […] I would say that in the past nine months we have seen developments that seem to be heading in the direction of some of these things that are happening earlier than expected. “
The lieutenant governor’s recent statements suggest that the Bank of Canada is changing its stance on a CBDC.
In October 2020, the Bank of Canada published a report outlining the main risks associated with a CBDC. The bank said you owe “Think carefully about how to add and use CBDC” to ensure that CBDC is a safe and efficient payment method.
In February 2020 Lane said there were no compelling arguments for the Bank of Canada to bring a Canadian dollar to market and said it would continue to be “well served by the existing payments ecosystem.”
Despite the surge in digital payments due to the COVID-19 pandemic and China’s advances in the digital yuan, a number of countries around the world have taken a “watch and wait” approach to CBDCs, including the US. New Zealand and Russia.