Coordination Among Central Banks Not Critical to CBDC Rollout: Bank of Canada Director

Brazil will likely begin its CBDC pilot in the second half of 2022, according to statements from the president of its central bank.

By Shomik Sen Bhattacharjee | Updated: 13 April 2022 13:28 IST

Coordination Among Central Banks Not Critical to CBDC Rollout: Bank of Canada Director

Photo Credit: Unsplash/ sebastiaan stam

The Bank of Canada director stated that a Canadian CBDC is still a fair way away from launch

Highlights

BOC's director doesn't believe blockchain is critical to CBDC projects
The BOC recently announced a 12-month research project with MIT
Brazil is set to begin its CBDC pilot in the second half of 2022

Central banks across the world have been trying to work on their respective Central Bank Digital Currency (CBDC) projects and while several nations believe that there should be consensus on aspects like CBDC design, Canada's central bank is of the belief that roll-out efforts don't require coordination between nations. Dinesh Shah, the director of the Bank of Canada (BOC) has stressed that since the roll-out of CBDCs don't necessarily point toward the need for blockchain technology at its core, a consensus is “not a central focus” unless cross-border payments are what the respective banks are on the lookout for.

Speaking to The Block in an interview Shah says that decisions regarding a CBDC are specific to individual countries due to their differing payment systems.

In 2020, officials from the Bank of International Settlements and the Bank of England announced that they would oversee a group of six central banks, including the BOC, as they pool together research on CBDC use cases. Referring to the group of six central banks and their plans, Shah noted that its existence was to serve as a research pool. "Even if there's no consensus, that open sharing of ideas is very valuable," he says.

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Shah stressed that a Canadian CBDC launch is still a fair while away. The BOC director states that talks are still so much in the nascent stage that the role of blockchain technology in designing any CBDC is still to be defined. Blockchain technology "is not a given but it's still on our list of potentials," he says, noting that he has displayed some scepticism in the past about its fit with a retail CBDC.

Shah's comments also arrive after the Bank of Canada and the Massachusetts Institute of Technology (MIT) recently agreed to collaborate on CBDC research.

Meanwhile, the president of the Central Bank of Brazil has confirmed (via CoinTelegraph) that the country's sovereign digital currency pilot will go live this year.

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Speaking at an event presented on April 11, Roberto Campos Neto, president of the Central Bank of Brazil said that the project will digitise the Brazilian real “without creating a break in the banks' balance sheets.” He added that the digital currency will be guaranteed by the Brazilian real and that banks will be able to issue stablecoins on top of deposits.

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