- Canada to collaborate with MIT to expand its CBDC research.
- The research is expected to last for a year.
- The apex bank still maintains it isn’t releasing a CBDC soon.
Canada’s central bank has disclosed that they will be working with the Massachusetts Institute of Technology (MIT) to extend their CBDC research. However, the Bank has revealed no intention to launch a CBDC.
A Year-Long Research
In a press release yesterday, the Bank of Canada, the country’s apex bank, announced that they would be working with MIT to explore the potential of blockchain technology in developing a CBDC. The Bank of Canada’s statement revealed that the research would go on for 12 months.
The Bank, in the statement, revealed that it would be an extension of the research carried out by the institution’s Digital Currency Initiative (DCI). According to the press release, the Bank reported that the collaboration would “help inform the Bank of Canada’s research effort into CBDC.”
The release clarified that the project extended the Bank’s research into digital financial solutions. Canada’s apex bank plans to focus on how a CBDC functions by implementing different technologies.
“The project forms part of the Bank’s wider research and development plan on digital currencies and fintech. It will focus on exploring and experimenting with potential technology approaches to determine how a CBDC could work.” However, Canada’s central Bank added that “No decision has been made on whether to introduce a CBDC in Canada.”
The Bank’s research first started in 2020, when it approached 4 different Canadian institutions to research the idea of a CBDC. Reports from the institutions, including the University of Calgary, McGill University, and a joint report from the University of Toronto and York University, were released last month. Similarly, the Bank of Canada said, “While the Bank is ramping up contingency planning for a central bank digital currency, it currently has no plans to issue one.”
The Global CBDC Race
While the Bank of Canada appears to be taking more strides in its research of a CBDC, they appear to do so “only to inform its thinking and advance the public conversation on a central bank digital currency design.” However, the same can not be said for other countries, as pursuing a CBDC seems to have taken priority for some.
Amongst developed economies, the focus is on China and the United States. China, at the moment, appears to be winning this race as the Asian powerhouse continues to conduct tests in different regions of the country, each larger than the previous one.
While Biden’s executive order signed earlier this month appears to place urgency on the development of a CBDC, there are fears that polarization among United States legislators on the issue of digital assets may slow them down. Pundits believe that on a geopolitical level, the outcomes of this race could decide if the dollar remains the world reserve currency and change the shape of international settlements as we know it.