Bank of Canada Making Progress on CBDC, Urges Intl. Cooperation

In an interview with Reuters published on Wednesday, October 28, chief of the Canadian central bank, Tiff Macklem, said the BoC is working with some G7 member states on its plans for a national digital currency. Macklem also stated that G7 members should share information on their CBDC plans and timelines. According to Macklem, a “globally coordinated approach was needed to prevent surprises and keep such tools from being used by criminals.” The G7, which consists of the largest IMF-advanced economies in the world like the United States, Germany, and Japan, typically collaborate on macroeconomic issues. For its part, the BoC is also already a member of a working group that includes the central banks of England, Sweden, Japan, Switzerland, and the Bank for International Settlements (BIS).

Moving Canada Ahead

Macklem also commented that the Bank of Canada is moving from the proof-of-concept stage toward more fully executable plans, but that there is no pressing need for a CBDC “right now.” Despite this position, Macklem, who has been in office since June, did voice concerns over being beaten by other countries, adding that his institution wants to ensure it’s ready for a CBDC launch if the need becomes urgent. “If another country has [a CBDC] and we don’t, that could certainly create some problems. We certainly wouldn’t want to be surprised by some other country,” he said.

A Trending Topic

Macklem’s comments come at a time when CBDCs are an increasingly hot topic worldwide. China has been aggressively running trials for its CBDC as it looks to break its dependence on the global dollar payment system. It recently ran a $1.5 million real-world test. China is not the only non-G7 country making strides toward a national digital currency. South Korea has plans to test CBDC delivery in 2021, and Japan is working on the legislative mandate required to launch its CBDC. Additionally, the Bahamas digital currency went live earlier this week, and the Bank of Lithuania has unveiled a digital collectible as a controlled CBDC experiment.