Bank of Canada plans 2023 CBDC consultation as it moves to development
Bank of Canada Governor Tiff Macklem reportedly said that next year (2023) the central bank plans to consult the public on a potential central bank digital currency (CBDC). It is moving from the research phase into the development phase to be prepared if the need arises to issue a CBDC. However, the Governor made clear that a decision on whether to issue a CBDC is up to parliament. Macklem outlined three drivers that could result in the launch of a retail CBDC; a loss of control over the Bank’s monetary authority if there is a dramatic switch from cash usage into other digital currencies, or if Canadians heavily adopt a private sector stablecoin, particularly one not denominated in Canadian dollars. [Read more at Ledger Insights]
An update on rationales for CBDC issuance and systemic design considerations
Reserve Bank of Australia (RBA) central bank digital currency (CBDC) research partner, the Digital Finance Cooperative Research Centre (DFCRC) published an update on the state-of-play regarding the possible CBDC issuance in higher-income economies with good electronic payments systems. It concludes that it is unlikely that there will be actual issuance of retail CBDCs in higher-income countries anytime soon. However, it conjectures that wholesale CBDCs could potentially be implemented sooner, reflecting that, conceptually, they arguably represent only a modest technological modification to the settlement/reserve accounts that central banks currently provide, and might be less of an issue politically than retail CBDCs. [Download the paper at the DFCRC]
CSA provides update to crypto trading platforms operating in Canada
The Canadian Securities Administrators (CSA) is strengthening its approach to oversight of crypto trading platforms by expanding existing requirements for platforms operating in Canada. Also, the CSA announced that it is of the view that stablecoins, or stablecoin arrangements, may constitute securities and/or derivatives. In that context, crypto trading platforms that are registered or that have entered into a pre-registration undertaking are prohibited from permitting Canadian clients to trade, or obtain exposure to, any crypto asset that is itself a security and/or a derivative. Crypto trading platforms are expected to have established policies and procedures to determine whether each crypto asset they provide exposure to is a security and/or derivative. [Read more at the CSA]
Kiffmeister’s Global Central Bank Digital Currency Monthly Monitor
Just a reminder that I produce a monthly digest of central bank digital currency (CBDC) developments exclusively for the official sector. So for any of you out there who work for a central bank, ministry of finance or international financial institution who would like to receive it by email on the first business day of every month, please DM me on LinkedIn or email me at chronicles@kiffmeister.com.
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