Canada has reportedly paused its Central Bank Digital Currency (CBDC) project, which began in 2017. According to a September 18 CBC news story, after years of researching the potential for a digital version of the Canadian dollar, the local central bank has decided to step back from the initiative.
## Bank of Canada Rethinks Digital Currency Plan
The CBDC project was initiated in response to rapid digitalization and evolving payment habits among Canadians. In 2022, the country’s central bank also conducted a public consultation to gather opinions on the potential of virtual currency. However, a subsequent report released by the institution in November 2023 highlighted that while Canadians were familiar with CBDCs, they “struggled” to understand the rationale for a virtual version of the country’s fiat currency.
In a later online survey, nearly 87% of participants stated they would never use a digital Canadian dollar. A further 92% indicated that under no circumstances would they ever prefer CBDCs over existing means of payment. Cybersecurity threats and privacy issues were also raised, with 87% expressing concerns over the Bank of Canada’s ability to protect digital currency users against cyber attacks. The fiscal regulator has always insisted that the digital Canadian dollar would not replace paper notes but was intended to simplify online purchases and fund transfers. Now, it seems even less committed to the idea, reportedly pivoting its attention to policy research and analysis to adapt to the changing payments landscape.
## Global CBDC Momentum Continues to Grow
The reported shift in priorities comes even as the world sees increased interest in CBDCs. Three countries—the Bahamas, Jamaica, and Nigeria—have fully launched such products and are now working to expand their use. Additionally, data from the Atlantic Council’s CBDC tracker shows that as of September 2024, 134 countries and currency unions—representing 98% of global GDP—are exploring central bank-issued digital currencies. Industry watchers say that such projects have increased due to geopolitical events like Russia’s invasion of Ukraine. There are now 13 cross-border initiatives in progress, including Project mBridge, which links banks in China, Thailand, and other nations. China’s digital yuan pilot remains the largest globally, with transactions reportedly totaling 7 trillion yuan (approximately $986 billion) as of June 2024, nearly quadrupling last year’s total.
Twitter: Canada pauses its CBDC project after years of research. Cybersecurity and privacy concerns raised. Global momentum for #CBDC continues to grow with 134 countries exploring digital currencies. #DigitalCurrency #BankOfCanada #FinancialInnovation
