{"id":493157,"date":"2024-09-20T10:52:25","date_gmt":"2024-09-20T14:52:25","guid":{"rendered":"https:\/\/www.investmentexecutive.com\/?p=493157"},"modified":"2024-09-20T10:52:25","modified_gmt":"2024-09-20T14:52:25","slug":"bank-of-canada-drops-plans-to-issue-digital-currency","status":"publish","type":"post","link":"https:\/\/www.investmentexecutive.com\/news\/industry-news\/bank-of-canada-drops-plans-to-issue-digital-currency\/","title":{"rendered":"Bank of Canada drops plans to issue digital currency"},"content":{"rendered":"

The Bank of Canada is ending its work on issuing a digital Canadian dollar four years after the central bank began studying the possibility.<\/p>\n

On its website, the Bank of Canada announced Thursday it was \u201cscaling down its work on a retail central bank digital currency.\u201d<\/p>\n

The bank explained the decision by saying its research work on the digital Canadian dollar was complete and other payments issues had become more pressing.<\/p>\n

\u201cThe body of knowledge built over recent years will be invaluable if, at some point in the future, Canadians, through their elected representatives, decide they want or need a digital Canadian dollar,\u201d the bank’s site stated.<\/p>\n

The BoC will continue monitoring global retail central bank digital currency (CBDC) developments and publish related research, but its focus will turn to \u201cpreparing for the evolution of payments both in Canada and around the world, through policy research and analysis.\u201d<\/p>\n

That focus would \u201cinclude its payments oversight and supervision functions, policy development related to wholesale and retail payments infrastructure, as well as policy work on cross-border payments in collaboration with our central bank partners.\u201d<\/p>\n

The Bank of Canada began conducting research<\/a> on a digital currency in 2020, including examining the implications of a digital dollar on the economy and financial system, and the design features and technological approaches to providing a digital form of public money.<\/p>\n

Last year, the the bank launched a public consultation<\/a> on issuing a digital currency, the results of which found that Canadians were mostly against the idea based, in part, on privacy and security concerns.<\/p>\n

According to research <\/a>from the U.S.-based think tank Atlantic Council updated this month, 134 countries and currency unions, representing 98% of global GDP, are exploring a CBDC, but only three countries \u2014 the Bahamas, Jamaica and Nigeria \u2014 have \u201cfully launched\u201d their own digital currency.<\/p>\n

BoC ponders AI and inflation<\/h2>\n

Bank of Canada governor Tiff Macklem says there is a lot of uncertainty around how artificial intelligence could affect the economy moving forward, including the labour market and price growth.<\/p>\n

In a speech in Toronto at the Economics of Artificial Intelligence Conference, the governor said Friday that the central bank is approaching the issue cautiously to get a better understanding of how AI could affect its job of keeping inflation low and stable.<\/p>\n

“Be wary of anyone who claims to know where AI will take us. There is too much uncertainty to be confident,” Macklem said in prepared remarks.<\/p>\n

“We don\u2019t know how quickly AI will continue to advance. And we don\u2019t know the timing and extent of its economic and social impacts.”<\/p>\n

The governor said AI has the potential of increasing labour productivity, which would raise living standards and grow the economy without boosting inflation.<\/p>\n

In the short-term, he said investment in AI is adding to demand and could be inflationary.<\/p>\n

However, Macklem also highlighted more pessimistic scenarios, where AI could destroy more jobs than it creates or lead to less competition rather than more.<\/p>\n

The governor called on academics and businesses to work together to shed more light on the potential effects of AI on the economy.<\/p>\n

“When you enter a dark room, you don\u2019t go charging in. You cautiously feel your way around. And you try to find the light switch. That is what we are doing. What we central bankers need is more light,” he said.<\/p>\n","protected":false},"excerpt":{"rendered":"

Central bank also wonders how AI could affect inflation<\/p>\n","protected":false},"author":73592,"featured_media":416110,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[2318,2312],"tags":[2629,54148,2426],"yst_prominent_words":[6855,79221,79220,21016,21015,21012,10193,8006,7313,2167,6665,6351,2177],"acf":[],"_links":{"self":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts\/493157"}],"collection":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/users\/73592"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/comments?post=493157"}],"version-history":[{"count":4,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts\/493157\/revisions"}],"predecessor-version":[{"id":493188,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts\/493157\/revisions\/493188"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/media\/416110"}],"wp:attachment":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/media?parent=493157"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/categories?post=493157"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/tags?post=493157"},{"taxonomy":"yst_prominent_words","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/yst_prominent_words?post=493157"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}