Bank of Canada halts CBDC project amid global digital currency growth

The Bank of Canada has halted its Central Bank Digital Currency (CBDC) project, which began in 2017, pivoting towards research and policy analysis instead. 

According to a CBC report from September 18, the Canadian central bank has moved away from the digital dollar initiative after years of exploring its potential. 

The project was initially launched in response to the growing digitalisation of payments in Canada. 

In 2022, the bank conducted a public consultation to gather feedback on the idea. 

However, a report released in November 2023 revealed that while many Canadians were familiar with the concept of a CBDC, they struggled to see its benefits. 

An online survey further showed that 87% of respondents said they would never use a digital Canadian dollar, and 92% preferred existing payment methods over CBDCs. 

Cybersecurity and privacy concerns also emerged, with 87% expressing doubts about the Bank of Canada's ability to protect digital currency users from cyber threats. 

The central bank had assured the public that a digital Canadian dollar would not replace physical cash, but instead serve as a tool to simplify online transactions. 

However, with the pause in the project, the Bank of Canada is now focusing on researching how to adapt to changes in both local and global payment systems. 

Globally, interest in CBDCs continues to grow. 

Countries such as the Bahamas, Jamaica, and Nigeria have fully launched their digital currencies, and China’s digital yuan pilot remains the largest, with total transactions reaching 7 trillion yuan (about $986 billion) by June 2024. 

As of September 2024, 134 countries and currency unions—representing 98% of global GDP—are exploring or developing CBDC projects. 

Despite Canada's decision to pause its CBDC project, the global push towards digital currencies shows no sign of slowing down.