The Bank of Canada published the results of its central bank digital currency (CBDC) consultation. A public survey open to all Canadians signaled opposition to a Canadian digital dollar, with concerns about privacy and how it would impact citizen rights.
That’s hardly surprising. Prime Minister Trudeau’s Emergency declaration during the COVID trucker blockade led to the freezing of more than 200 bank accounts. This incident has fueled government control arguments against CBDC far beyond Canada’s borders.
A discussion paper previously published by the central bank shows it is internally skeptical about the potential uptake of a retail CBDC.
Apart from the public poll, the Bank of Canada held discussions with banks and civil society groups and ran focus groups. These unveiled demands which might be tricky to satisfy.
For example, civil society groups believe a key barrier to financial inclusion is identity documents. They want people to be able to access a CBDC without any ID and offline. The Bank said it will try to better understand the barriers to accessing financial services and look to address them. A previous report indicates that work is already under way.
Banks had the usual concerns that a CBDC might attract away deposits. And they want to participate in any CBDC distribution. But on the whole, they wanted more information about the CBDC plans.
Hence, the Bank of Canada provided some clarifications, including that any decision on a digital dollar issuance rests with parliament. However, it believes it needs to be prepared. Canada previously cited its number one concern as monetary sovereignty. A CBDC would be desirable if the United States launched a CBDC or a U.S. stablecoin became widely used in Canada.
In terms of CBDC design, the Bank of Canada clarified it’s planning a two tier system with banks dealing with all consumer and merchant facing issues. And to address concerns about deposit flight, it has no intention of paying interest on any CBDC.