The Bank of Canada and Massachusetts Institute of Technology (MIT) are exploring how advanced technologies could affect the potential design of a central bank digital currency (CBDC).
Canada’s central bank will spend 12 months on the project, carried out in collaboration with MIT Media Lab’s digital currency initiative team, to experiment with potential technology approaches and determine how a CBDC could work.
The project forms part of the Bank of Canada’s wider research and development agenda on digital currencies and fintech and came with the caveat that “no decision has been made on whether to introduce a CBDC in Canada”.
Canada is not the only country exploring CBDCs. The Bank of England is planning a consultation on their implementation this year, following publication of the foundational principles report from the Bank for International Settlements (BIS) and a group of seven central banks in 2020.