The Bank of Canada’s Office of the Superintendent of Financial Institutions has released a report which examined the benefits and disadvantages of the central bank issuing its own digital currencies. Such currency would be called “central bank digital currency” (CBDC).
The research report was prepared by two senior researchers – Walter Engert, Senior Director, Research – Office of the Superintendent of Financial Institutions Canada, and Ben S. C. Fung, Director of Economic Research and Analysis in the Currency Department of the Bank of Canada. Their main role is to provide leadership in the department’s economic research program.
Engert and Fug also provide advice to the department on issues related to developments in retail payments and their implications for the demand for cash. This is important, because even though the authors noted that the report is their opinion alone, and not necessarily the position of the bank, their advice carries weight.
Part of the report reads:
“Is it sufficient for a central bank to supply only reserves to qualified financial institutions? Put differently, is a ‘cashless society’ a sound outcome?”