OTTAWA: The Bank of Canada on Monday (Oct 18) reiterated it has no plans to introduce a digital currency for the time being, but said that might change if people began using physical cash less.
The Canadian central bank says it is well into the development process on a cash-like digital currency that it could release to the public, should the need arise. A number of other central banks are doing similar work.
"We haven't made a decision to issue one yet because we basically don't see a compelling need under current circumstances," Bank of Canada Deputy Governor Timothy Lane told a virtual panel organized by a Washington think-tank.
If people started using paper money and coins less, that might present the bank with a stronger case for bringing in its own digital currency, he said, noting that during the COVID-19 pandemic some businesses had stopped accepting cash and coins.
If that persisted, it "could leave some households out in the cold, in effect impair their ability to participate fully in the economy," Lane said. "One would have to think seriously about whether a digital equivalent to cash would perform a valuable role in financial inclusion."