Planning for a digital version of cash
Two scenarios could warrant an introduction of a digital currency by the Bank of Canada:
- If the use of physical cash is reduced or eliminated altogether, leaving some Canadians left out
- If private cryptocurrencies make serious inroads, creating concerns about privacy and handing control of payments to private companies
In these scenarios, Canadians and their government could decide we need a central bank digital currency (CBDC). The Bank of Canada would design it to provide the benefits of cash—safe, easy to access, private and a good store of value—but in a digital version that consumers could use to buy things electronically online or in person at a shop.
As we prepare for a possible future digital currency, we want to start a discussion of what it might look like in Canada. In doing so, the Bank will consult widely to answer questions such as:
- What design features might make a CBDC attractive for merchants and users?
- How would a digital currency work with other methods of payment?
- How would a CBDC work for cross-border transactions?
- How can we protect privacy while preventing illicit uses?