The Central Bank of Canada said that while it will not be issuing a digital currency anytime soon, it will still develop a blueprint in case a pressing need becomes apparent, according to a report by Bloomberg.
The country’s central bank is looking at the various features and requirements involved in setting up a digital currency. Deputy Governor Tim Lane gave the news at a speech on Tuesday (Feb. 25) in Montreal. The bank also released a document containing background information about the potential prototype of a central bank digital currency (CBDC).
“We need to move forward to work out what a potential CBDC might look like and how it could be managed, if the decision were ever taken to issue one,” Lane said.
There has been movement at central banks around the world over the development of digital currencies, especially with organizations like the Libra Association attempting to make their own.
Of the 66 central banks interviewed by Basel-based Bank for International Settlements (BIS), some 80 percent were working on a CBDC initiative, which is an increase of 10 percent from the year before.
The Bank of Canada is looking at two potential scenarios in which it will create a digital currency. The first is if actual usage of cash is restricted or eliminated altogether, and the second is if private crypto becomes increasingly more popular with the general population.
“In both scenarios, there would be an argument for the Bank of Canada to step in,” Lane said. “The bank would do this as a trusted public institution, creating an official digital currency that is designed with the interest of the public as its top priority, with no commercial motive.”
The bank is reportedly working on a prototype, but the coin would need legislative framework, and it is still years away from being developed completely.