Published: November 20, 2020
Payments Canada has published Central Bank Digital Currency (CBDC): The Fundamentals, the first in a series of educational papers on CBDC. The fundamentals paper explores the motivations for CBDC issuance in Canada and outlines the differences between CBDC, cryptocurrency and conventional bank notes, as well as discusses emerging CBDC use cases.
The concept of central bank digital currencies (CBDC) has been a topic in the payments ecosystem for some time for interbank payments as well as everyday transactions. This interest has been accelerated by the COVID-19 pandemic and the ensuing migration to digital payments. A recent Bank for International Settlements (BIS) paper indicated central banks around the world are engaging in research, experimentation or development of CBDCs and Canada is no exception: in January 2020, the Bank of Canada announced the creation of a working group to share experiences and knowledge as CBDC implementation is considered.
These educational papers will provide a base of understanding for furthering the discussion around CBDC in Canada and its impacts on key players in the payments industry and end users, along with the potential economic and social implications.