Bank of Canada Explores Technical Framework for Retail CBDC in New Research

The Bank of Canada has advanced its exploration of a digital Canadian dollar, outlining a technical framework for a retail central bank digital currency (CBDC) designed for everyday transactions. The research paper introduces OpenCBDC 2PC, a model developed with MIT's Digital Currency Initiative, emphasizing privacy, speed, and decentralization. Users could hold digital funds directly, akin to digital cash, with transactions possible without identity disclosure to banks or payment processors.

Privacy remains a focal point, addressing global concerns over state surveillance potential in CBDCs. The proposed system decouples personal identity from transaction data, enabling non-registered users to self-custody funds. This MOVE follows the bank's 2023 pivot away from active CBDC development, positioning it as a contingency for future public demand.