Bank of Canada Partner with MIT for CBDC

Today, the Bank of Canada (BOC) announced that it will partner with MIT to research the development of a central bank digital currency (CBDC).

Specifically, the BOC will collaborate with MIT’s Digital Currency Initiative (DCI) to test potential CBDC technology and evaluate the risks and benefits of digital currencies.

This stage of the project is exploratory, and the BOC stressed that no decision has been yet made to introduce a CBDC in Canada.

MIT’s DCI said in a statement on their website that “their interest in this collaboration with the Bank of Canada stems from a desire to have, as much as possible, a hand in ensuring that neutral, responsible research is being done with this technology before any policy decisions are made.”

The DCI is also working with the Boston Federal Reserve on a CBDC research project called Project Hamilton, which primarily looks at the feasibility of a general-purpose digital dollar, as well as understanding any technical challenges, opportunities, risks, and tradeoffs that might be associated with such as large scale digital currency roll-out.

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There has been a flurry of CBDC activity and news over the past number of months. According to the Atlantic Council’s CBDC tracker, 87 central banks are currently exploring the use of a CBDC (which represents over 90% of the world’s GDP).