Five patterns that recur in retail central bank digital currency (CBDC) designs were identified in a new Bank of Canada staff analytic note. The research focused on information organization and compared software rather than real or proposed CBDCs, and it examined the practical implications of its findings for retail payment systems. The author, Sriram Darbha, called the patterns he identified “archetypes.” They were characterized by how the CBDC’s state – information about its supply and ownership – was maintained and how it was updated. Those characteristics have implications for both bank policy and hardware, according to Darbha. He said: “After …

A study from the Bank of Canada found that Bitcoiners surveyed, on average, have lower financial literacy than those who don’t own Bitcoin (BTC). The study was compiled from four years of annual surveys from 2016 to 2020, with the sample sizes ranging anywhere from 1,987 to 3,893 respondents. The Bank of Canada’s full study titled “Bitcoin Awareness, Ownership and Use: 2016-20” was published on Tuesday. A key conclusion from the study was that: “Bitcoin owners displayed greater knowledge about the Bitcoin network than nonowners, yet they scored lower on questions testing financial literacy.” However, the financial literacy testing was …

Multiverse Computing, a quantum computing firm with offices in Canada and Spain, has partnered with the Bank of Canada to run simulations on how the adoption of cryptocurrency might proceed as a payment method. In a Thursday announcement, Multiverse Computing said it used its equipment as part of a proof-of-concept project with the Bank of Canada to generate examples of how non-financial firms may end up adopting crypto. The quantum simulations used scenarios with 8 to 10 financial networks with more than 1.2 octillion possible configurations. According to the firm, it was “important to develop a deep understanding of interactions …

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 the project is part of a broader development agenda on digital currencies, fintech and how CBDCs could work in a Canadian context. It cautions that “no decision has been made …

Cryptocurrencies like Bitcoin (BTC) do not pose any significant risk to the financial system at their current level of adoption, according to Bank of Canada’s Deputy Governor Paul Beaudry. Beaudry spoke about the risks to the stability of the Canadian financial system at the Ontario Securities Commission Dialogue 2021 on Nov. 23. When asked whether cryptocurrencies are a risk, the deputy governor responded that the Bank of Canada doesn’t think that crypto is “developing in a way that creates a systemic type of risk for a financial system” up to now. This is because cryptocurrencies are “quite removed from a …

A study released by Canada’s central bank, Banque du Canada, has noted a number of favorable reasons that the country could benefit from its own Central Bank Digital Currency, or CBDC. The document laid out two scenarios that might result in the bank issuing a CBDC at some future date. One would be if citizens were no longer widely using cash within the country for reasons that were left unspecified. The other could be if a digital currency, public or private, were to become so widely adopted as to threaten the sovereignty of Canada’s existing central currency. Participants did not …

The Bank of Canada does not see a strong reason for issuing a central bank digital currency 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 of Canada has not found any solid case for issuing a CBDC. Lane said: “In terms of where we are with the …

Following a major cryptocurrency sell-off, Canada’s central bank stated that digital assets like Bitcoin (BTC) remain a highly risky asset despite their adoption by institutional investors. The Bank of Canada issued on Thursday its financial system review, an annual report outlining the most important financial risks and economic vulnerabilities. As part of the review, the central bank paid specific attention to cryptocurrencies, stating that crypto volatility is an emerging vulnerability to Canada’s financial system: “Price volatility stemming from speculative demand remains an important obstacle to the wide acceptance of crypto assets as a means of payment. Despite the broadening institutional …

Major Canadian universities have submitted new research to the Bank of Canada centered around the development of a central bank digital currency, or CBDC, underscoring the innovation underway in this space. The research began last year after the BoC engaged four institutions around potential designs for a national cryptocurrency. A total of three proposals were published simultaneously on Thursday. Notably, each proposal was based on the application of blockchain technology. The submission from the University of Calgary leverages “a mix of distributed ledger technologies (DLTs) and electronic cash (“e-cash”) schemes with advanced cryptographic primitives.” The submission focuses extensively on promoting …

According to an Oct. 15 report from The Canadian Press, Timothy Lane, deputy governor of the Bank of Canada, or BoC, said central banks should have their own digital currency ready should regulators block Facebook’s Libra token. He also noted that such an asset is important as a possible solution for the economic realities of COVID-19. Lane spoke at an online panel discussion hosted by the Central Bank Payments Conference, stating that the Bank of Canada has been developing a central bank digital currency, or CBDC, at "a good pace." He said the bank would need to hold consultations regarding …

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 begun digitizing their currencies in the form of a …

A report from Canada’s central bank shows that while most Canadians are knowledgeable about basic finance and Bitcoin, few actually hold any crypto assets. According to the results of Bank of Canada’s 2019 Cash Alternative Survey published in August 2020, financial literacy is positively associated with the awareness of cryptocurrencies but negatively associated with ownership. The bank considers financial literacy as a basic understanding of investing and saving for retirement, with 47% of respondents from August to September 2019 estimated to have a high level of financial literacy and 18% a low level. The results suggest that Canadians with a …