Business

Central banks must move faster on digital currencies amid COVID-19, Bank of Canada says

A Bank of Canada official says pandemic-related shifts in how people shop means central banks must speed up work on creating their own digital currencies.

Bank of Canada deputy Timothy Lane made comments in speech

Bank of Canada deputy Timothy Lane says that shift in spending habits coupled with the speed of technological developments has narrowed the window to deliver a digital currency issued by the central bank.

A Bank of Canada official says pandemic-related shifts in how people shop means central banks must speed up work on creating their own digital currencies.

COVID-19 has meant more people are shopping online, and foot traffic for brick-and-mortar storefronts hasn't caught up to pre-pandemic levels for many small and medium-sized businesses.

Bank of Canada deputy Timothy Lane says that shift in spending habits coupled with the speed of technological developments has narrowed the window to deliver a digital currency issued by the central bank.

The comments from an online panel today are a turnaround from late February, just before the pandemic struck, when Lane said there wasn't a compelling case to issue a central bank-backed digital currency.

The Bank of Canada has started work on its own digital currency should others become widely used in Canada and erode the central bank's ability to manage monetary policy.

Lane says today that the bank would have to hold widespread consultations to understand what Canadians would want in a digital currency before the central bank could issue one.