As an analyst with over two decades of experience in the financial sector and a keen observer of global monetary trends, I find myself intrigued by this recent shift in stance by both the Bank of Canada and the Reserve Bank of Australia regarding their central bank digital currencies (CBDCs).
According to recent reports, the Bank of Canada appears to be abandoning plans for a Central Bank Digital Currency (CBDC), a move that comes seven years after initial explorations into digitizing payment systems.
According to a report from CBC News, it appears that the Bank of Canada may not be as eager to develop a digital version of the Canadian dollar, often referred to as the “digital Loonie.” However, it’s important to note that the Canadian Central Bank has yet to publicly halt its research into central bank digital currencies (CBDC).
In response to CBC News, a representative from the Bank of Canada shared that they have conducted extensive studies on the potential effects of a retail central bank digital currency. Moreover, it’s been noted that their focus has shifted towards examining trends in the Canadian and global payment systems.
According to findings from the Atlantic Council’s research, it appears that a staggering 134 nations, accounting for 98% of the worldwide economy, are delving into digital currencies. Among these countries, 44 are already testing out central bank digital currencies.
This week saw a similar shift in Australia, as their central bank abandoned plans to create a retail Central Bank Digital Currency (CBDC) and instead opted to concentrate on developing a wholesale CBDC. They pointed out that a retail CBDC poses “substantial issues” for maintaining financial stability and implementing monetary policy effectively. In contrast, they view a wholesale CBDC as more of an enhancement than a radical change in our existing monetary system.
Global Push for CBDC
Currently, the Bank of Canada’s latest move coincides with an ongoing global trend where various nations are aggressively developing their central bank digital currency (CBDC) initiatives.
Approximately 65 nations, which include significant rising economic powers like India, Australia, and Brazil, are progressing in the late stages of investigating Central Bank Digital Currencies (CBDCs). These ongoing initiatives are either at the testing phase or on the verge of being rolled out.
In August last month, Pierre Poilievre, the Canadian Conservative Party’s leader, expressed firm resistance to the introduction of Central Bank Digital Currency (CBDC) within Canada. He also vowed to safeguard the use of cash and resist the government’s efforts towards digitalizing the economy.
He additionally expressed approval for Canadian Member of Parliament Ted Falk’s Bill C-400, which intends to outlaw the introduction of such a currency.
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2024-09-19 13:51