CBDC Design Needs to Address Risk to Users, Says Bank of Canada

Is risk in the eye of the beholder? Canada's central bank, the Bank of Canada, recently put out a report on the risks and benefits of a central bank digital currency. "An anonymous token-based central bank digital currency (CBDC) would pose particular security risks," the Bank of Canada wrote in its Oct. 5 report. "These risks arise from how balances are aggregated and stored, how CBDC is used for transactions, and how various solutions such as e-wallets, crypto exchanges and banks compete to attract users."Over the past year or so, discussions have picked up and various governments have....

The bank will work alongside the MIT Media Labs’ Digital Currency Initiative (DCI) team to examine how “advanced technologies could affect the potential design of a CBDC.” The Bank of Canada has partnered with the Massachusetts Institute of Technology (MIT) to work on a 12 month research project focused on the design of a Central Bank Digital Currency. According to a March 16 announcement, the bank will work alongside the MIT Media Labs’ Digital Currency Initiative (DCI) team to examine how “advanced technologies could affect the potential design of a CBDC.” The Bank of Canada stated that....

Amid the global CBDC race, the Canadian central bank does not currently see a strong case for issuing a state digital currency. The Bank of Canada does not see a strong reason for issuing a central bank digital currency, or CBDC at the moment.Timothy Lane, the Bank of Canada’s deputy governor and head of research at the bank’s fintech and crypto department, spoke on CBDC issues at a Wednesday panel, Reuters reports.According to the official, the Canadian central bank is now focused on CBDC implementations in more concrete terms, thinking about how it might work and look. However, the Bank....

COVID-19 could force the Bank of Canada to launch a CBDC sooner than previously expected. Timothy Lane, Deputy Governor of the Bank of Canada and head of research at the bank’s fintech and crypto department, claimed that Canada’s central bank digital currency, or CBDC, might see the light of the day “sooner than expected. Lane delivered his remarks in a Dec. 1 interview on the Bank of Canada’s approach to digital payment systems.According to Lane, the predicted decline in COVID-19-fueled cash transactions has been happening more rapidly than the bank had previously expected. This could....

Experts point out sticking points as well as greatest needs in the creation of central bank digital currencies for domestic and cross-border, wholesale and retail, uses. The process of introducing a central bank digital currency (CBDC) is fraught with unknowns, some of which were elucidated in a panel of experts gathered Monday at the World Economic Forum in Davos, Switzerland. The panel concluded that good design is key to a successful CBDC, and there are fewer challenges for wholesale CBDC introduction.Bank of Thailand governor Sethaput Suthiwartnarueput said that although many central....