Bank of Canada teams up with MIT on CBDC development

The Bank of Canada has teamed up with the Massachusetts Institute of Technology (MIT) to conduct a strategic research project focused on the development of the Central Bank Digital Currency (CBDC).

As per the announcement, the central bank has decided to work alongside the Digital Currency Initiative (DCI) team of MIT Media Labs to explore how advanced innovations can affect the potential design of a national digital currency.

Though the country is still developing its CBDC, it had already hinted about the same in 2019, as TheCoinRise reported.

The Bank of Canada stated that the partnership comes under its wider development goal on digital currencies, fintech, and how they could be used in a Canadian context.

The central bank of Canada went on to warn that “no decision has been made on whether to introduce a CBDC in Canada.”

MIT is already working with the Federal Reserve Bank of Boston and recently highlighted the disadvantages associated with the use of Distributed Ledger Technology.

It evaluated a “hypothetical general purpose CBDC” utilizing two alternative models: distributed ledger technology (DLT) and processing transactions in parallel on numerous systems rather than being dependent on a single ordering server to prevent double-spending.

Biden’s plans on CBDC

The United States president Joe Biden’s Executive Order on Ensuring Responsible Development of Digital Assets states that his government will prioritize “research and development efforts into the potential design and deployment options” of CBDC.

The Secretary of the Treasury and other relevant officials are also supposed to prepare a research study on a local CBDC, while the attorney general is charged with leading an effort to evaluate any necessary legislative amendments for a CBDC and to submit a legislative proposal as soon as possible.