On Oct. 18, 2020, The Bank of Canada took a step towards the development of a Central Bank Digital Currency (CBDC) by announcing their desire to hire an economist for digital currencies.
As per a job advert on the bank’s official page, the winning candidate should have advanced knowledge of financial tech and digital currencies such as BTC and ETH. He must also have experience in analyzing public blockchain data..
The economist will monitor and analyze current developments in the field of electronic funds and payments. He will also implement research projects and look into the “potential development of a CBDC.”
The job posting marks the latest in a series of steps taken by the Bank of Canada towards developing a CBDC.
Back in June, the bank issued an analytical note that examined how a CBDC would work. The note highlighted the need to develop a CBDC that would be as accessible as cash via a dedicated universal access device.
The note added that a potential CBDC’s design should integrate many of the attributes of fiat currency, such portability and offline functionality.
Canada Looks to Accelerate CBDC Development
Canada’s central bank has long explored multiple formats for a CBDC. Research into a potential CBDC to replace cash for institutional use has been going on for at least four years now after Canada launched a blockchain Project dubbed “Jasper” for Canadian securities.
In Sep 2019, the head of digital currency research at the Bank of Canada, Stephen Murchison, emphasized the need to “innovate to stay in the game”.
In a presentation to board members, he advocated for the development of a CBDC, noting that it would carry all the benefits of cash and the convenience and security of electronic payments. Since then, research into a public-focused currency has gained momentum.
In Feb 2020, Tim Lane, deputy governor of the Bank of Canada, hinted at plans to develop a CBDC due to the possible mass adoption of digital currencies. At the time, Lane said that the bank saw no “compelling case” to support the launch of a CBDC. However, this standpoint has since changed in the wake of Covid-19.
As per a Reuters report published on Oct 14. 2020, Tim Lane now sees the urgency to research how a CBDC would work. During a panel discussion looking into the future of money, Lane recognized the shift of activities online brought on by the pandemic.
He then went on to stress the need to ramp up research efforts into a digital central bank product.
Security Fears Still Linger
An Oct. 5 report by the Bank of Canada highlighted that regulators are wary of particular security risks surrounding CBDCs.
“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,” the bank explained.
Regulators are now analyzing the risks of individuals holding their own tokens or entrusting them to crypto exchanges or other third-parties.