COVID-19 has pushed Bank of Canada toward 'digital loonie'

The Bank of Canada is pushing ahead with digitizing its currency.

In a speech today, BoC deputy governor Timothy Lane noted that the COVID-19 pandemic had accelerated the need to digitize cash. Lane said: "The pandemic may bring us to a decision point sooner than we had anticipated."

Lane was, however, careful to specify that "a digital currency is by no means a foregone conclusion." In October, Lane that said central banks should stand by with digital tokens in the event that Libra, now Diem fell to regulators. Today, he noted that central banks may be more trustworthy than private stablecoin suppliers in terms of use of consumer data:

"A central bank—with no commercial motivation to harvest data—is uniquely positioned to build in safeguards for privacy, while at the same time defending against criminal uses. Privacy is clearly important to Canadians, and it’s also in the public interest to protect some degree of privacy."

Today's remarks fall in line with the steady decline of cash usage in Canada over the course of 2020, a trend that Lane noted in December.