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Bank of Canada has announced that it is establishing a partnership with MIT to undergo a year-long collaboration on CBDC research.
The country is opting to research central bank digital currencies, but has not promised to be creating one yet.
The Bank of Canada will partner with MIT’s Digital Currency Initiative (DCI) to research central bank digital currencies (CBDCs).
According to the announcement from the Bank of Canada, the union will “explore how advanced technologies could affect the potential design of a CBDC.”
Additionally, the Bank of Canada further dismissed that the country has not decided on creating a CBDC yet. However, it indicated that a hypothetical asset of this nature would presumably be price-pegged to and backed by the Canadian dollar and be distributed on digital ledgers.
In July 2021, the bank had previously disclosed its findings that CBDCs could be a catalyst for competition, improve consumer choice, and reduce the need for financial middle-men. It also cited that a CBDC will only be created if and only if a net positive effect is expected.
More CBDC Projects Are Emerging
Before this partnership with the Bank of Canada, MIT’s Digital Currency Initiative has previously worked on a few other crypto-related projects.
One of the most relevant projects the DCI has worked on is the Federal Reserve Bank of Boston’s CBDC project, in which first-phase results were published in February.
Several other governments and central banks are extensively considering the adoption of central bank digital currencies, with countries like the UK, Malaysia, and Mexico still in the early stages.
Moving to other parts of the world, China and Nigeria have both created central bank digital currencies that are currently in circulation amongst the general public.