Engaging Canadians in Shaping the Future of Money: Bank of Canada Asks for Public's Voice on the Digital Loonie

The Bank of Canada (BofC) has been studying the potential role of a central bank digital currency (CBDC) for some time, and now the research is taking another paramount step forward!

Specifically, the The Bank of Canada has put in motion an online public consultation to gather opinions on the features that should be included in a digital Canadian dollar.

The consultation runs until June 19 and aims to understand Canadians' priorities regarding the potential use, security features, accessibility, and privacy concerns of a digital currency.

The BofC carries on its shoulders the responsibility to:

1. preserve the value of money (inflation control),
2. supply bank notes (physical currency in circulation) and oversee systemically important payment systems in the country.

The ongoing wave of innovation in digital asset has a real chance to impact those crucial tasks and, as this consultation demonstrates, the BofC is clearly aware of that.

Whatever the potential triggering scenario under which a digital “loonie” is developed and deployed (e.g., an irreversible trend towards a cashless society, or the increase in predominance of private digital currencies, such as stablecoins to name a few prominent ones) the BofC is surely aiming for a broad adoption.

For that, the institution is clear that the design of the CBDC is crucial, and the public consultation turns out to be a fundamental tool for collecting information to optimize its design.?

Indeed, the consultation fundamentally seeks input from future potential users of CBDCs on what matters the most for them, for maximizing adoption and usage.

However, the benefits from this input collecting mechanism goes beyond that. It also fosters transparency and trust in the institution, gathers insights and perspectives from a diverse range of Canadians, identifies priorities and concerns, and measures the level of public interest (which could serve as a raw estimate of demand for CBDC).

Besides, the consultation will generate valuable information for policymakers, so that the best decisions are taken related to the future of a Canadian CBDC.?

It is worth considering that the BofC’s press release states that:

"At this time, a digital Canadian dollar is not needed".

While this conclusion may be based on the institution’s own research, it is worth to fully consider the potential role of public money in the rapidly evolving financial landscape.

Currently there is not public money available for use as a means of payment in the digital asset ecosystem – encompassing transactions, settlement, and ownership of digital, tokenized assets (available today, and more importantly in the not-so-distant future) such as bonds, equities, real estate, artwork, carbon credits, and many other use cases.

A CBDC would ensure that public money remains a viable and competitive option in these emerging digital markets; a secure and stable digital payment option, backed by the central bank, in an increasingly digital world.