Canada’s central bank announced year-long cooperation with MIT on CBDC research.
The Bank of Canada will conduct research on central bank digital currencies in collaboration with MIT’s Digital Currency Initiative (DCI) (CDBCs).
According to the Bank of Canada, the initiative would “investigate how new technologies may impact the possible design of a CBDC” and “guide [the bank’s] CBDC research work.”
In today’s statement, the Bank of Canada revealed that the nation has not yet determined whether to establish a CBDC. However, a hypothetical asset of this sort would very certainly be tied to and backed by the Canadian dollar and would be distributed through a distributed ledger.
The bank has committed to providing an update on its study results at the conclusion of the twelve-month term.
Previously, in July 2021, the Bank of Canada determined that CBDCs might increase competition, expand consumer choice, and eliminate the need for financial intermediaries. Additionally, it stated that a CBDC would be implemented only if it was likely to have a net beneficial impact.
Additional CBDC Projects Are Currently Underway
DCI has already collaborated on a number of other crypto-related initiatives at MIT. Most importantly for today’s news, it aided the Federal Reserve Bank of Boston’s CBDC initiative. The first part of that project’s findings were released in February.
Additionally, this study resulted in the publication of OpenCBDC-tx, a transaction processor suitable for future CBDCs.
Several other nations and central banks are exploring central bank digital currencies as well. The United Kingdom, Malaysia, and Mexico are all in the early stages of CBDC research and development. Elsewhere, China and Nigeria have developed CBDCs that are now in use by the general population.