Bank of Canada accelerates work on digital currency amid pandemic

FILE PHOTO: A sign is pictured outside the Bank of Canada building in Ottawa, Ontario, Canada, May 23, 2017. REUTERS/Chris Wattie/File Photo

Feb 10 (Reuters) - The COVID-19 pandemic has added urgency to the Bank of Canada’s development of a digital currency and decision could come sooner than previously thought, a senior policymaker said on Wednesday, though he noted that a launch was not a “foregone conclusion.”

Bank of Canada deputy governor Tim Lane, speaking to digital intelligence audience, also said that while the pandemic has boosted cryptocurrencies like Bitcoin, recent prices spikes look like “speculative mania” and they remain implausible as the currency of the future.

“For several years, the Bank of Canada has been analyzing which circumstances might lead Canada to decide to issue a digital currency. The pandemic may bring us to a decision point sooner than we had anticipated,” said Lane, pointing to growing cash hesitancy in Canada and the rise of cryptocurrencies.

But while the pandemic had accelerated the central bank’s work to prepare for the day when it might launch a so-called digital loonie, Lane made clear that moment had not yet arrived.

“In a speech ... a year ago, I gave our preliminary view: we did not see a need for a central bank digital currency at that time,” said Lane. “A year later, our view remains unchanged: a digital currency is by no means a foregone conclusion.”

(Reporting by Julie Gordon and David Ljunggren)

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