Central bank digital currency (CBDC)

We are building the capability to issue a digital version of the Canadian dollar—known as a central bank digital currency (CBDC)—that Canadians can trust and rely on so we can be ready should the need arise. Currently, we do not have plans to issue a digital currency. Ultimately, Parliament and the Government of Canada will determine if or when to issue a CBDC.

Understanding CBDC

Simply put, a CBDC is digital money issued by a central bank.

If a Canadian CBDC were issued, individuals and businesses could use it to pay for products or services using a mobile phone or a special card or device. It would be like cash but with the added benefit of being able to be used online.

This official digital currency would retain its face value in Canadian dollars because it is issued by the Bank of Canada, just like bank notes.

Changing times

The Bank of Canada is responsible for supplying bank notes to Canadians and for making sure there is confidence in the Canadian dollar. To do this, we need to adapt to changes in the way Canadians pay for goods and services. Canadians are using:

  • cash less often
  • digital payments, such as credit and debit cards, more often
  • mobile payment options more frequently

The day may come when Canadians can no longer readily use cash or when an alternative private digital currency becomes widely adopted. That might be the tipping point when a CBDC could be needed.

Did you know?
CBDC is quite different from cryptocurrencies issued by the private sector. Cryptocurrencies are a digital asset that can be used as a method of payment. Transactions that use cryptocurrencies are listed in a public database, called a distributed ledger, that is shared across a network of computers. Transactions are processed by a decentralized group of participants. At this time, however, private cryptocurrencies are generally used as an investment rather than to buy things. This is because their value can fluctuate quickly and often, and transactions can be expensive and take a long time to process.

Researching digital cash

We are researching attributes of a potential CBDC to determine, for example, how it would be:

  • private
  • safe
  • universally accessible

To support this work, we are engaging with a broad group of stakeholders, including:

  • consumers
  • merchants
  • financial institutions

This is an important step in our efforts to better understand how a digital version of cash could affect Canadians.

Timeline

We don’t see a need to issue a CBDC right now. And we don’t know if we will need to in the future. But we need to prepare for this possibility because it will take several years to develop, and the process must address complex policy issues including privacy, security, accessibility, and universal access.

Ultimately, Parliament and the Government of Canada will determine if or when to issue a CBDC.  For background information on the Bank’s official position on CBDC, see Contingency Planning for a Central Bank Digital Currency.