After years of research, the Bank of Canada is preparing to design its own central bank digital currency (CDBC).
Revealing its plans in a June 11 job posting, the central bank said it was “reinventing central banking” and radically rethinking the nature of Canada’s cash.
“The Bank of Canada is embarking on a program of major social significance to design a contingent system for a CBDC, which can be thought of as a banknote, but in digital form,” the bank wrote.
CoinDesk’s request for comment was not returned by press time.
Still, the job posting said as much about the new role – CBDC Project Manager – as it did about the project itself, going into detail on some of the features of a digital banknote.
According to the job posting, Canada’s CBDC should protect user privacy (though not to the degree that cash does), remain accessible to those without bank accounts or mobile phones, work when the power is out and rival banknotes in their security, so as to gain confidence among the cash-wielding public.
Further, the bank wants its CBDC to live on an architecture “with a potentially multi-decade evolving lifespan” that can grow in tandem with policy goals.
Other technical details remain undetermined, however. The bank did not state what technology its CBDC might run on, whether it would follow a token-based or account-based model, or how it could create a digital currency that works where electricity does not.
Those details will take shape over the project manager’s three-year tenure. During that time, the bank also wants to build out a “CBDC pilot system.”
The move casts Canada as a serious contender in the race to develop CBDCs. Many nations have begun mulling the issue of national digital currencies and some, including China, appear to be on the verge of issuing their own. But only a handful have actualized their findings to the extent that the Bank of Canada is doing now.
To be clear, the bank has not committed to issuing a CBDC just yet. Officials downplayed the need for one as recently as February, arguing there was no ”compelling case” for a Canadian CBDC unless a private digital currency such as Libra took off.
“While the Bank is ramping up contingency planning for this eventuality, there is not a compelling case at this time to issue a CBDC,” a Bank of Canada spokesperson told CoinDesk after publication of this article. “While the use of cash at points of sale may have decreased during the pandemic, we have not seen a material change in demand for bank notes.”
Update (June 16, 19:15 UTC): Added comment from a Bank of Canada spokesperson.