Timothy Lane, Deputy Governor of the Bank of Canada said that the bank has seen developments in the plans regarding the launch of a CBDC.
In February, Lane said the central bank did not see a compelling case for issuing a central bank digital currency (CBDC). Then he outlined two scenarios that could lead to this: the refusal of the population to use cash and the widespread use of private digital currencies.
According to a member of the bank’s governing council, “some of these things are happening earlier than expected.”
“In particular, we have seen a move away from cash transactions much faster than previously thought. How temporary and simple this is due to the pandemic, and how much – the beginning of a new trend remains to be seen, but, of course, this is what we are watching very closely, ”said Lane.
He added that the regulator is increasing monitoring of these phenomena, and the working group continues to prepare for the launch of the CBDC. The deputy head of the Bank of Canada did not specify a specific term.
“In any case, it will take a significant amount of time to complete the order, because you need to make sure that there are all the necessary working technologies, security is provided, there are legal agreements and everything else that needs to be done properly,” he stressed.
In addition, it is necessary to understand all the risks of CBDC for the financial system, he said.
Read also: Will CBDC Make Life Easier?
According to Lane, of the seven central banks that are part of the CBDC study group under the patronage of the Bank for International Settlements (BIS), the Bank of Canada and the Central Bank of Sweden have advanced the most in this topic.
Earlier, the Canadian central bank noted that the launch of CBDC could be a risky step for states, which would threaten their financial stability. The regulator also called on countries to coordinate approaches to developing a digital currency.
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