The Bank of Canada is exploring the possibility of issuing a central bank digital currency (CBDC), also known as a digital Canadian dollar, and is seeking Canadians’ input on what features they would like to see in such a currency. Although the bank has stated that it does not currently see a need for a digital dollar, it is preparing for the possibility in case it becomes necessary in the future.
A digital Canadian dollar would function similarly to physical bank notes, but in a digital form that could be used for online transactions. The currency would be backed by the Bank of Canada and would provide an additional payment method for Canadians.
Bank of Canada is “asking” for your opinion on the digital banking bid! PLS share this out far and wide ! Public Consultation on a Digital Canadian Dollar https://t.co/7uGQ1DBWPF
— TakeActionCanada (@cdntruthseekr) May 8, 2023
The bank has emphasized that a digital dollar would not replace physical cash, as bank notes would continue to be issued as long as there is demand for them. However, as more and more payments become digital, it is possible that a point may be reached where cash is no longer widely accepted in day-to-day transactions, at which point a digital dollar could become necessary.
The Bank of Canada’s exploration of a digital dollar comes as many other central banks around the world are also considering the possibility of issuing CBDCs. These currencies would provide a number of potential benefits, such as increased financial inclusion, improved payment efficiency, and reduced costs associated with cash handling.
