CBDC as a cryptographic platform with Bank of Canada

As announced on March 17, 2022, the Bank of Canada collaborated on a two year CBDC research project with the MIT Digital Currency Initiative. The agreement supported and built on the DCI’s ongoing research into CBDC, while also contributing to the Bank of Canada’s wider research agenda into digital currencies and fintech. The work investigated and experimented with potential CBDC technology designs and approaches, and evaluated key tradeoffs, opportunities, and risks. While no decision has been made on whether or not to introduce a CBDC in Canada, this type of research can help inform wider policy development by contributing important technical ideas and questions. 

One of the results from this collaboration is a paper released on June 13th 2025 by the Bank of Canada

A Retail CBDC Design for Basic Payments: Feasibility Study

Abstract: We frame the wide spectrum of possible system architectures for an online retail central bank digital currency (CBDC) and identify a promising architecture well-suited for basic payments. We select OpenCBDC 2PC, a representative system design that fits this architecture and analyze it using a range of criteria to assess the feasibility of such system designs. Our analysis, augmented with lab experiments, focuses on retail payment systems with two-tier deployment and includes a detailed assessment of non-repudiation, integrity of the monetary supply, privacy, compliance, scalability of performance and resilience of the system state. It suggests that such system designs can be fast and cheap for basic payments, with high privacy, although some areas such as integration with retail payments systems, performance of auditing and resilience of the core system state require further investigation. Our framing highlights other promising architectures for an online retail CBDC, whose analysis we leave as an area for further exploration.