Central Bank Digital Currencies [CBDC] is currently the topic of interest of several governments across the globe. Canada seems to be alarmed by the swift movement of other nations as the country was seen prepping for the launch of its very own CBDC. The deputy governor of the Canadian central bank, Timothy Lane appeared in an interview giving the world insights about the development of the country’s CBDC.
Canada To Roll Out CBDC Sooner Than Expected
The emergence of COVID-19 limited the use of cash and fueled the need for digital payments. This gave the authorities a reality check and initiated the fast flow in the development of CBDC. While China revealed that it was way ahead in the CBDC race, several countries were seen trying to catch up, whereas a few others continued slacking.
Timothy Lane, the deputy governor of the Bank of Canada who is also the head of research at the central bank’s crypto and fintech department revealed that the bank’s perception towards CBDCs has changed over the course of nine months. While the pandemic was one of the reasons, the other was the emergence of other virtual currencies. The central bank feared that these had the potentials of undermining or disrupting the monetary sovereignty of Canada.
While the country is working without setting a deadline, Lane revealed that the world might see a Canadian CBDC “sooner than expected.” Furthermore, China’s headway towards the development of CBDC has left many alarmed. Addressing the same, Lane said,
“The Chinese economy is big enough that even something that is only usable in China, it’s going to already have a very large market. At the same time, there are countries that China has closer economic ties with where there could be more use of a renminbi-based digital currency. I don’t really know if that’s part of their intent or not, to promote a greater use of the renminbi in electronic payments in other parts of the world.”
Additionally, several in the world believe that CBDCs embodied a solution that was in quest of a problem. Lane, however, believed otherwise. While suggesting that CBDCs would not have seen the light of the day if it did not address a real issue, Lane pointed out that it is a mere response to the change in finance and technology. Modernizing is very important. If people failed to do so and continued to dwell in the existing means, there would be a huge gap in the system, he added.