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.
According to a March 16 announcement, 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.
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 the MIT DCI’s first partnership with a bank for CBDC research, with Cointelegraph reporting earlier at the start of February that it had published research on the topic in collaboration with The Federal Reserve Bank of Boston.
Dubbed “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.
CBDCs – memorably described by Asset Strategies International president Rich Checkan as being “concocted in hell by Satan himself” andwith Edward Snowden warning about the implications for privacy and freedom – have been grabbing the headlines of late.
In terms of the U.S. 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 U.S.-based CBDC.
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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.