Reports said that the Bank of Canada has partnered with the Massachusetts Institute of Technology (MIT) to work on a 12-month research project focused on the design of a Central Bank Digital Currency (CBDC).
It has been reported that the bank will work alongside the MIT Media Labs’ Digital Currency Initiative (DCI) team to examine how “advanced technologies could affect the potential design of a CBDC.” The Bank of Canada stated that the project is part of a broader development agenda on digital currencies, fintech, and how CBDCs could work in a Canadian context.
However, it cautions that “no decision has been made on whether to introduce a CBDC in Canada,” but said it would provide an update once the research project has been completed. This is not MIT DCI’s first partnership with a bank for CBDC research, at the start of February, it had published research on the topic in collaboration with The Federal Reserve Bank of Boston.
The report said that named as “Project Hamilton,” it tested a “hypothetical general purpose CBDC” using two potential models including distributed ledger technology (DLT) and processing transactions in parallel on multiple computers, rather than relying on a single ordering server to prevent double-spending.
Likewise, CBDCs, memorably described by Rich Checkan, Asset Strategies International president, as being “concocted in hell by Satan himself” and with Edward Snowden warning about the implications for privacy and freedom, has been grabbing the headlines of late.
It is to be mentioned that in terms of United States President Joe Biden’s executive order on Ensuring Responsible Development of Digital Assets outlines that his administration will place “the highest urgency on research and development efforts into the potential design and deployment options” of US-based CBDC.
Thus, the executive order also directs the Secretary of the Treasury and other relevant officials to produce a research report on a local CBDC, while the attorney general has also been tasked with leading an effort to “to assess any necessary legislative changes” required for a CBDC and to promptly develop a legislative proposal afterward.