IT was back in February of 2020 when Timothy Lane, the Bank of Canada’s Deputy Governor, boldly proclaimed that the country did not need to enact a central bank digital currency (CBDC). However, Lane did say that the Bank of Canada will develop one regardless, just in case it needs it in the future.
Things Are Closer Than They Appear
The tables have seemingly turned, by now, and Lane is suggesting that this need to have a CBDC is not only there, but coming sooner than the Canadian central bank had anticipated.
Lane, having spoken at a FinTech conference back in February, stated that the Bank of Canada doesn’t know what the future holds. Even so, the bank is eager to move forward in working out what their country’s CBDC would look like. Alongside this, should the Bank of Canada decide to issue it, the central bank also needs to know how to manage it.
Canada Becoming too Cashless To Ignore
That conference had Lane outline two key scenarios in which Canada’s government could be prompted to issue out the CBDC they’ve been working on. The first of these conditions is cryptocurrencies becoming simply too popular, which would create privacy concerns or otherwise threaten the Canadian Dollar’s supremacy in its own soil. The second is regarding whether or not Canada as a society completely phases out cash usage for a new digital economy, which would create its own economic disparity.
It seems that the latter condition is becoming more and more prevalent, according to the latest interview with Lane. At the Centre for International Governance Innovation, a Canadian think tank, he reminded the public of those two scenarios he made back in February.
Indeed, he highlighted that the Bank of Canada had seen some interesting developments in the past nine months, indicating that some of those conditions are coming to fruition far sooner than the central bank anticipated.
Being Prepared In Any Event
He highlighted how the pandemic is making Canadian citizens less reliant on cash, but Lane remains unsure whether this development will linger after the pandemic was dealt with.
While this comment is no definitive declaration, it makes it clear that the Bank of Canada is taking a harder look at its plans for a CBDC. Indeed, Lane explained that things are moving quicker than the bank had anticipated.
While the bank isn’t sure if these trends will continue after the pandemic, Lane made it clear that it wants to be ready if it doesn’t, readying its CBDC earlier than it had planned.