Countries around the globe have been improving their payment ecosystems to keep up with the times. This has resulted in technology developing faster than ever before, with cryptocurrencies and blockchain technology playing a critical role.
Canada has become a net country to jump into the digital currency bandwagon after China and possibly the United States, with its deputy governor recently outlining future plans.
Canada is known for its functioning financial ecosystem and plans to integrate blockchain and crypto into it, said Time Lane, Deputy Governor of Canada. Lane stated that the government had not planned to launch the CBDC soon, but had begun work to do so in the future, if necessary. He revealed this during a seminar in Montreal where he did not touch on the top of rate moves.
Lane added that at present, there was no “compelling case” to create a government-issued digital token. According to the government official, there were two financial scenarios that would put the spotlight on creating a CBDC. One is where physical fiat money is completely eliminated from the market and use cases disappear. The second scenario would be where cryptocurrencies are taking massive leaps in developments and institutions are starting to adopt it.
The concept of a CBDC is not new as several regions have gone over the topic earlier. China is one of the best examples of a major superpower planning to adopt a national digital currency.
The Red Dragon has taken the plan seriously as more than 80 patents related to blockchain technology were filed by its government. CBDC’s differ from cryptos such as Bitcoin and Ethereum because the former is run by a government while the latter is completely decentralized.
During the speech, the Deputy Governor of Canada stressed that the CBDC would only improve the existing financial ecosystem. He also pointed out that Canadian citizens have been well served by the central bank and the payment ecosystem.
The central bank plans to consult with multiple stakeholders to design the functioning of the proposed Canadian digital currency. Lane has ensured that the meetings will include federal and provincial governments, regulators, merchants and payment service providers.
At the moment, the bank is working on a prototype that will go through multiple processes before being fit for release. Even if regulation discussions and roundtable are completed soon, it will still be years before an actual official launch.