Few financial topics generate as much heat and as little shared vocabulary as the central bank digital currency. Some readers picture a state-run ledger of every coffee purchase, others a harmless payments upgrade. Neither picture reliably describes what Canada, the United States or other countries have actually done.
Canada has no retail digital dollar, no bill to create one and no decision to issue one. In September 2024 the Bank of Canada said there was not currently a compelling case to move forward and that it was scaling down its retail work. The United States has gone the other way: a 2026 statute bars the Federal Reserve from issuing a retail CBDC until the end of 2030, although the restriction is temporary and its reach over designs that do not use a distributed ledger is legally uncertain. Elsewhere, a few countries have launched retail systems with modest uptake, China has restructured its e-CNY, and the euro area is still negotiating the legislation a digital euro would need.
Whether any of this threatens privacy or autonomy depends less on the label than on architecture and law. This article separates what a system could technically do, what the law currently permits, and what governments have said they intend. It does not argue for or against a Canadian digital dollar, but it says where a design would materially increase visibility or control.
The underlying question for readers of this site is financial sovereignty: whether people can access, transfer and use their money under predictable, lawful and reviewable rules. The most relevant Canadian precedent for financial restriction, the 2022 Emergencies Act measures, involved ordinary bank accounts and no CBDC at all.
Money Basics: What a CBDC Is and Is Not
Most of the money Canadians use is not central bank money. A chequing balance is a liability of a commercial bank, an Interac e-Transfer moves bank liabilities between institutions, and a credit card is a loan. Only banknotes and the settlement balances that eligible institutions hold at the Bank are direct claims on the Bank of Canada.
A CBDC would add a digital liability of the central bank. A retail CBDC would be open to households and businesses, a wholesale one limited to financial institutions for settling large payments. Stablecoins, tokenized deposits and crypto assets are not CBDCs.
Blockchain and Two-Tier Designs
A CBDC does not require a blockchain. The Bank of Canada’s 2025 feasibility paper examined an architecture based on OpenCBDC, the open-source design that grew out of the Federal Reserve Bank of Boston’s Project Hamilton, a research effort with MIT that is not a decision to issue anything. Most proposals also use two tiers: the central bank issues, and regulated intermediaries manage customers. Where identity data sits largely determines who can see what.
Canada: Chronology and Current Position
Consultation and Scale-Down
From May 8 to June 19, 2023 the Bank, working with Forum Research, ran an open online consultation. Its report, published in November 2023, records 89,423 responses. Of all respondents, 85 per cent chose the option “I would not use a digital Canadian dollar” on a question about what they would use one for, and 88 per cent disagreed that the Bank should be researching and building the capability to issue one. The report’s chart labels indicate that about 82 per cent strongly disagreed.
Those numbers need their context, which the report itself supplies. The survey was an open link shared through Bank channels, social media and respondents’ own networks, which the report says introduces selection bias, and it states that participation is not representative of the Canadian population. No weighting or margin of error is reported. The results show strong opposition among people who chose to take part. They are not a poll of what Canadians as a whole think.
On September 24, 2024, Governor Tiff Macklem said in remarks that there was not currently a compelling case to move forward with a CBDC in Canada. The Bank would scale down its retail work, shift its focus to broader payments system research and policy development, keep monitoring global developments and be ready to ensure Canadians always have a safe and secure supply of public money. The work was redirected and reduced, not terminated, and no plan to issue was announced.
Research Versus Decision
Two staff papers show what continued research looks like. Staff Discussion Paper 2025-9, published in June 2025, is a feasibility study of a retail CBDC design for basic payments. It examines an OpenCBDC-based architecture and concludes that such designs can be fast and cheap with high privacy, while flagging further work on integration and resilience. Staff Analytical Paper 2026-30, dated June 2026, stress-tests a non-interest-bearing retail CBDC against Canada’s largest banks in a severe recession and finds, under its assumptions, that they remain resilient if the rollout is gradual and accompanied by holding limits and adjustments to capital and liquidity rules.
Neither paper is a decision. The Bank states that its staff research is independent and may differ from the Bank’s own views. Through the cutoff, no government body had tabled legislation, launched a public pilot or announced a decision to issue.
Who Could Issue One: Reading the Statutes
The question is not whether any provision says an Act of Parliament is required. None does. The better question is whether existing text clearly authorizes a retail digital liability. This section separates what the text says from what requires interpretation, and it needs qualified legal review.
What the text provides. Section 25(1) of the Bank of Canada Act gives the Bank the sole right to issue notes, and section 2 defines “notes” as notes intended for circulation in Canada. Section 18 lists the business the Bank may carry on, and deposits may be accepted only from the parties named: the Government of Canada (paragraph (l)), banks and certain other payments-system members (l.1), provincial governments and federal corporations or agencies (l.3), foreign central banks and certain international institutions (m), and money an Act of Parliament authorizes or requires to be transferred to the Bank (o). The public is not on that list. Paragraph (p) adds a power to carry on business activity incidental to or consequential on something the Bank may or must do under the Act. Under the Currency Act, section 7.1 makes a note current if issued under the Bank of Canada Act, and section 8(1) defines legal tender as a tender in current coins and current notes, subject to coin limits.
What is interpretation. A retail token might be read as a “note” intended for circulation, but that stretches a definition written for physical instruments, and no court has addressed it. A retail balance might be read as a deposit, but section 18 limits who may deposit, so that reading seems to need an amendment. Paragraph (p), an incidental power, might be read narrowly by courts.
The defensible summary is that the statutes do not clearly authorize a retail CBDC, do not explicitly prohibit one, and would not make a digital unit legal tender without change, because section 8 is written in terms of coins and notes. Legislation would be the prudent route, but whether Parliament must legislate is a legal conclusion this article does not reach.
Legal Tender Versus Acceptance
Legal tender and a duty to accept are different things. Section 8(1) of the Currency Act defines legal tender by the form of payment: current coins and current notes, within the coin limits in the later subsections. The Act contains no rule that a business must accept cash at a till. Section 13(1) separately provides that contracts and transactions are to be carried out in the currency of Canada unless they are in a foreign currency or a multi-country unit of account.
Related Developments That Are Not a CBDC
Canada’s Stablecoin Act was enacted through Bill C-15, the Budget 2025 Implementation Act, No. 1, which Parliament’s LegisInfo record shows received Royal Assent on March 26, 2026 (Statutes of Canada 2026, chapter 3). Law-firm bulletins report that the Act makes the Bank of Canada supervisor of fiat-backed stablecoin issuers not already prudentially regulated. The Department of Finance says regulations will be published for consultation, and none had been confirmed in force at the cutoff.
The Real-Time Rail is Payments Canada’s new payments system. Law-firm commentary reports that its by-law took effect on August 24, 2026, and Payments Canada announced the launch on November 9, 2026, with an initial cohort of participants and more to follow. Neither is a CBDC.
The United States: Policy, Statute and Cross-Border Effects
Two Different Instruments
American policy moved in two steps that are often conflated. The first is executive. On January 23, 2025, President Trump signed an executive order that, in section 5(a), prohibited federal agencies from taking action to establish, issue or promote a CBDC.
The second is statutory. Public Law 119-101 (H.R. 6644) was presented to the President on June 29, 2026 and, according to the enacted text, became law without his signature on July 11, 2026. Section 1101 inserted section 16A into the Federal Reserve Act. It defines a CBDC as a digital asset that is denominated in United States dollars, is a United States currency, is a direct liability of the Federal Reserve System and is widely available to the general public. It provides that the Board of Governors and the Federal Reserve Banks may not issue or create a CBDC, or any digital asset substantially similar to one, directly or indirectly through a financial institution or other intermediary.
Three further provisions matter. An exception says the prohibition does not apply to a dollar-denominated currency that is open, permissionless and private and fully preserves the privacy protections of United States coins and physical currency. A sunset says the section ceases to be effective on December 31, 2030. A rule of construction says nothing in it authorizes the Board to issue such an asset without an Act of Congress. The prohibition is directed at issuing or creating, and the text does not in terms address research. Only Congress can change the statute.
Does It Reach Every Kind of CBDC?
The enacted text does not settle this. Section 16A borrows the term “digital asset” from section 2(6) of the GENIUS Act, which defines it as any digital representation of value recorded on a cryptographically secured distributed ledger. Both the CBDC definition and the “substantially similar” language turn on that term.
On the narrow reading, a centralized, account-based digital dollar held in a single Federal Reserve database is not recorded on a distributed ledger, so it is not a “digital asset” and falls outside the prohibition. On the broad reading, the clause about issuing “indirectly through a financial institution or other intermediary” and the provision’s evident purpose would be taken to cover any retail digital dollar. The broad reading must contend with the fact that an express statutory definition cannot simply be set aside because of what a provision is generally understood to be for. Descriptions of the measure as anti-CBDC are no substitute for the enacted words. The narrow reading must contend with possible judicial reluctance to find that Congress left so large a gap. Which view prevails is a question for American counsel, and no authoritative judicial interpretation was found at the cutoff. The restriction plainly reaches a retail digital dollar recorded on a cryptographically secured distributed ledger through 2030, and its application to other designs is uncertain.
Related Bills and the Stablecoin Timetable
The Anti-CBDC Surveillance State Act (H.R. 1919) passed the House on July 17, 2025 but had not become law at the cutoff. It is separate from section 16A and from GENIUS.
The GENIUS Act, enacted July 18, 2025, created a federal framework for payment stablecoins. It takes effect on the earlier of 18 months after enactment or 120 days after the primary federal regulators issue final regulations implementing it. The Office of the Comptroller of the Currency announced a final rule on October 21, 2026, stating that the rule and the Act take effect on January 18, 2027. A further OCC rule on anti-money-laundering requirements is expected, and other agencies had not all finished their rules.
Privacy, Traceability and Data Access
Privacy in payments is several questions, not one: who can see a transaction, how long records are kept, who can compel access, and whether a user can transact without identifying themselves. The honest answer for any proposed CBDC begins with design.
How Records Arise Under Different Designs
In a centralized account-based design, the central bank operates a ledger of retail accounts and transactions. Every payment produces a record at the centre, and identity is whatever the central bank or its agent verified at account opening. This offers maximum visibility.
In a two-tier account-based design, regulated intermediaries hold customer accounts and identity data, and the central bank holds only aggregate balances or pseudonymous references. Privacy from the central bank can be real, while privacy from the intermediary is roughly what bank customers have today.
In a token-based design, value is carried by digital objects, and the system checks validity rather than identity. Cash-like privacy is possible in principle, particularly for small amounts. Offline designs, in which value is held on a device and exchanged locally, create records only when the value reconnects to the network.
Could a Central Bank Operate Without Knowing Identities?
Technically, yes, within limits. Blind signatures, introduced by David Chaum for digital cash, let an issuer sign a token without seeing which token it is, so it cannot later link the token to the person who withdrew it. The BIS Innovation Hub’s Project Tourbillon tested a design in which blind signatures give payers, but not payees, anonymity relative to the central bank, and reported that quantum-safe cryptography cut throughput by a factor of 200 compared with classical cryptography. It is a prototype.
Zero-knowledge proofs let a party prove a statement is true, such as that a payment is valid or a holder is under a limit, without revealing the underlying data. BIS Working Paper 1242 concludes that they show promise but remain computationally intensive, and it distinguishes hard privacy, enforced by cryptography, from soft privacy, enforced by institutional controls and data protection policy.
Anonymity in any of these designs is a matter of degree, not an absolute. Metadata such as timing and amounts can narrow down who paid whom. A compromised phone or wallet exposes what it holds. A payee, often an identified business, keeps its own records, and implementation flaws can undo a sound cryptographic design. Intermediaries that identify customers while hiding transaction details from the central bank would themselves hold the data, so compelled access would run through them. And anti-money-laundering rules typically require identification above thresholds, so strong anonymity tends to come with value caps.
Privacy From Whom?
The protections vary by audience. Against the central bank, privacy is strongest in blind-signature and two-tier designs and weakest in centralized accounts. Against intermediaries it is weak in any account-based design, because they verify identity and retain records. Against law enforcement, protection is legal, not technical: production orders, warrants and reporting duties reach whoever holds the data. Against unauthorized third parties it depends on security engineering.
Technical privacy is not fixed for all time. A future government could change the rules for newly issued money, require identity verification where money enters or leaves the system, restrict which intermediaries may take part, prohibit certain future transactions or replace the architecture. Those powers govern future behaviour. They do not necessarily let anyone reconstruct earlier anonymous transactions that were never collected, because information a system never recorded cannot be recovered by changing its rules. A change of rules can stop the same protection applying to what happens next. Privacy is better described as a combination of architecture, statute and oversight than as a property of the technology alone.
| Payment form | Who normally sees transaction data | Identity linked | Records kept | Compelled access |
|---|---|---|---|---|
| Cash | Counterparties only | No | None by default | Only at the point of exchange |
| Debit and credit card | Merchant, acquirer, network, issuing bank | Yes | Yes, by several parties | Court orders and production orders |
| Interac e-Transfer | Sending and receiving banks, payment operator | Yes | Yes | Court orders and regulatory requests |
| Centralized account-based CBDC | Central bank and its agents | Yes | Central ledger | Depends on law; single point of access |
| Two-tier CBDC | Intermediaries; central bank sees less | Yes, at intermediary | Depends on law | Depends on law; runs through intermediaries |
| Token or blind-signature CBDC | Potentially fewer parties | Potentially no for small amounts | Depends on design | Depends on law and design |
The last three rows are design-dependent because no Canadian CBDC exists.
What Canadian Law Already Requires
Four things are often run together here: mandatory reporting, recordkeeping, identity verification and compelled disclosure. Under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA), the listed entities in section 5, which include banks, credit unions, securities dealers and money services businesses, must keep records and verify identity in accordance with the regulations (sections 6 and 6.1). They must report to FINTRAC any transaction, completed or attempted, for which there are reasonable grounds to suspect a link to money laundering, terrorist financing or sanctions evasion (section 7), and certain prescribed transactions (section 9). Under the regulations, those include receipt of 10,000 dollars or more in cash or in virtual currency and the sending or final receipt of an international electronic funds transfer of 10,000 dollars or more, with rules that can treat related transactions as one and with exceptions.
FINTRAC does not receive a continuous feed of every Canadian transaction. It receives the reports the Act and regulations require, and section 55 restricts what it may disclose onward. Under section 55(3) it discloses designated information to police and certain other agencies only where, on its analysis, it has reasonable grounds to suspect the information would be relevant to investigating or prosecuting a money laundering, terrorist financing or sanctions evasion offence. A hypothetical CBDC would not automatically fall under every provision. That would depend on who issued and distributed it and how the law was amended. The useful question is how much data intermediaries would hold and who could demand it.
Privacy Law and the Charter
Federal institutions are subject to the Privacy Act, which limits collection of personal information to what relates directly to an operating program or activity (section 4) and sets conditions on disclosure, including to specified investigative bodies on written request (section 8). Private-sector organizations are subject to PIPEDA for personal information handled in commercial activities, with government institutions covered by the Privacy Act excluded (section 4).
These protections differ in kind. A constitutional right is one a court can enforce against legislation. The Charter has no stand-alone property right or general right to financial privacy, but section 8 protects against unreasonable search or seizure, and both courts in the 2022 litigation treated the information-sharing provisions as searches. A statutory protection can be amended by Parliament. A technical privacy feature is only as durable as the design and the rules around it, and a policy commitment binds only until the policy changes. Sections 7 and 2(b) protect liberty and expression, section 1 allows reasonable limits demonstrably justified in a free and democratic society, and section 33, the notwithstanding clause, lets Parliament or a legislature override certain Charter rights by express declaration. How a court would treat a particular future design cannot be predicted, and this article does not suggest that any hypothetical design would be unconstitutional.
Programmability: Five Different Things
“Programmable money” is used loosely. Separating five ideas, and marking how far each has gone, makes the debate more useful.
A. Conditional payments. Payments that execute when a condition is met, such as scheduled bills. Banks already offer them.
B. Restrictions on government transfers. Benefit payments spendable only on certain goods or within a period. This is the most developed category. The Reserve Bank of India’s annual report for 2025 to 2026, as reported in the Indian press, describes pilots using e-rupee programmability in direct benefit transfer schemes of the central and state governments.
C. Restrictions built into general-purpose currency. A digital dollar in which every balance carries spending limits, merchant categories or expiry. No jurisdiction reviewed has implemented this for ordinary balances, and no adopted design provides for it.
D. Restrictions imposed by intermediaries. Wallet providers or banks setting their own limits, as in China, where wallet limits depend on the verification tier, and in ordinary bank products. The intermediary, not the central bank, decides.
E. Restrictions imposed by legislation or emergency orders. The 2022 order, discussed below, applied to ordinary bank accounts, and nothing in Canada proposes a CBDC-specific restriction regime. This category is about legal authority, not money technology.
China and the Expiry Question
China is often cited as proof that digital money can expire. The evidence is narrower. Pilot “red envelope” giveaways in Chinese cities such as Shenzhen and Suzhou distributed small amounts of e-CNY by lottery with a limited spending period. Those were promotional vouchers. No evidence was found that ordinary e-CNY balances expire, and the vouchers do not show that they do.
Where a Restriction Could Be Enforced
The level at which a rule is enforced changes who controls it. A wallet-level rule runs on the user’s device or app, an intermediary-level rule is enforced by the bank or operator holding the account, and a payment-processing rule applies at the network that clears the transaction. A central bank-level rule runs on the issuer’s own platform, so one change could apply to every holder at once. Banks can restrict an account today, but each acts separately, so a uniform restriction needs instructions to many institutions, as in 2022. A single platform could in principle act faster and more uniformly. That is a technical inference, and a capability is not a legal power.
Safeguards Versus Assurances
Safeguards come in several kinds, and none is permanent. A statute, such as the digital euro proposal’s bar on programmable money, binds until a later statute replaces it. A regulation can be amended by its maker, oversight depends on the institutions that run it, and software lacking a restriction function can be changed by new code. Cryptographic design is the hardest to undo for value already issued and never recorded, but the rules around future issuance, conversion and intermediaries can change. A government’s assurance of no intention to restrict spending is not a safeguard. The most durable protection layers a statute, independent oversight and an architecture that lacks the capability, but none is irreversible.
Emergency Powers: The 2022 Case Study
On February 14, 2022, the federal government declared a public order emergency under the Emergencies Act in response to the convoy protests. The Emergency Economic Measures Order, SOR/2022-22, registered on February 15, 2022, did several separate things. Section 2 directed banks, credit unions, securities dealers, payment processors and other listed entities to cease dealing in property of “designated persons” and providing them financial services. Section 3 required entities to determine on a continuing basis whether they held such property, and section 4 required certain platforms and payment providers to register with FINTRAC and report. Section 5 required entities to disclose without delay to the RCMP or CSIS the existence of property they had reason to believe belonged to a designated person. Section 6 allowed government institutions to share information with those entities, and section 7 protected entities from civil proceedings for complying. The text contains no requirement for a court order or other prior judicial authorization. The emergency was revoked on February 23, 2022.
What the Courts Found
The courts addressed two instruments, and their findings should not be merged. The Emergency Measures Regulations (SOR/2022-21) created the prohibitions on participating in certain assemblies, travelling to them and providing property to support them. The Economic Order operated on the finances of people caught by those prohibitions.
In January 2024, Justice Mosley of the Federal Court held that the invocation was unreasonable, that the Regulations infringed freedom of expression under section 2(b) of the Charter (paragraphs 302 to 309), and that the Order infringed section 8. He found a strong expectation of privacy in financial information, and held that neither infringement was justified under section 1.
On January 16, 2026, the Federal Court of Appeal dismissed all of the appeals in 2026 FCA 6. It agreed that Cabinet lacked reasonable grounds to believe a national emergency existed, so the proclamation was unreasonable and ultra vires (paragraph 287), and that provisions of the Regulations infringed section 2(b) and were not saved by section 1 (paragraphs 378 to 382). On section 8 it differed in part. It held that the freezing provisions in section 2(1) of the Order did not amount to a search or seizure (paragraph 416), but that the information-sharing provisions in sections 5 and 6 were unreasonable searches, because they lacked prior authorization, set a low “reason to believe” standard and offered no review mechanism (paragraphs 432 to 458), and that they were not justified under section 1 (paragraphs 464 to 473).
The government sought leave to appeal, and the Supreme Court of Canada granted it on October 22, 2026, along with the cross-appeals of the Canadian Civil Liberties Association and the Canadian Constitution Foundation. A separate leave application from Canadian Frontline Nurses (file 42262) was dismissed with costs. The docket (file 42261) sets a notice of appeal deadline of November 23, 2026 and a factum deadline of February 1, 2027, and no hearing date had been set at the cutoff. The outcome should not be predicted.
What the 2022 Episode Does and Does Not Show
The 2022 measures show that existing banking infrastructure already allowed rapid, order-based restriction of named persons, with no CBDC involved. The legal power to restrict access to finance is separate from the technology. The litigation also shows that courts scrutinize such measures, and that the sharing of financial information drew specific criticism. What the episode does not show is whether a CBDC would make similar actions easier or harder. That depends on design, as the discussion of enforcement level explains.
International Experience
| Jurisdiction | Status (November 2026) | Adoption evidence | Source |
|---|---|---|---|
| Bahamas (Sand Dollar) | Launched October 2020 | Under 1 per cent of currency in circulation (mid-2024) | Reuters (mid-2024), via secondary reports |
| Jamaica (JAM-DEX) | Legal tender since mid-2022 | Under 1 Jamaican dollar in every 1,000 of Bank of Jamaica currency issued, end of June 2026 | Jamaica Observer, August 2026 |
| Nigeria (eNaira) | Launched October 2021 | About 860,000 wallets by end of November 2021, 0.8 per cent of active bank accounts; about 1.5 per cent of wallets active in a week | IMF Working Paper 23/104 |
| China (e-CNY) | Framework restructured January 1, 2026 | Cumulative 3.48 billion transactions worth 16.7 trillion yuan to end of November 2025; 230 million personal wallets opened (registrations, not active users) | PBOC data as reported by official media |
| India (e-rupee) | Pilot | Retail circulation 771.7 crore rupees at March 31, 2026, down from 1,016.5 crore a year earlier | RBI annual report 2025 to 2026 |
| Euro area (digital euro) | Legislation in trilogue | Not issued | EU institutions and ECB statements |
| Sweden (e-krona) | Inquiry recommended | None | Riksbank documents |
| Canada | Scaled-back research | None | Bank of Canada documents |
| United States | Statutory restriction to end-2030 | None | Public Law 119-101 |
Cumulative values, circulation, wallet registrations and active users are different measures and should not be compared with one another.
China
China’s e-CNY is the world’s largest program. The People’s Bank of China sets the rules and runs the core infrastructure, and commercial banks open wallets. On December 29, 2025, PBOC Deputy Governor Lu Lei announced an action plan taking effect on January 1, 2026, which moves the e-CNY from a digital cash model toward what the central bank calls digital deposit money. As reported by official outlets, e-CNY in commercial bank wallets is now an account-based liability of the commercial bank. Banks pay interest on real-name wallet balances at demand-deposit rates, the balances are covered by deposit insurance and count toward reserve requirements, and non-bank payment institutions holding e-CNY for customers must keep full reserves. Major state banks announced on December 31 that real-name wallets earn that interest, while at least two said the lowest-tier wallets, opened with only a phone number, do not.
What this does to the classification of the whole system is not clear from the sources reached. For balances in bank wallets, the e-CNY has moved toward a digital bank deposit and no longer functions as a direct claim on the central bank. Whether any central bank liability remains, and how the system is counted in M0 and M1, could not be determined, and the action plan’s full text was not obtained.
China describes its privacy approach as “controllable anonymity.” The wallet tiers set who must identify themselves and how much they may hold, but they show nothing by themselves about who can see transactions. A Stanford DigiChina commentary discusses the term.
The Caribbean and Nigeria
The Bahamas, Jamaica and Nigeria launched retail CBDCs, and all report modest uptake. Reuters reported in 2024 that the Bahamas planned regulation requiring banks to provide access to the Sand Dollar. The IMF’s May 2023 working paper, Nigeria’s eNaira, One Year After, described adoption as limited and called for a coordinated policy drive. It reflects the author’s views, not the IMF’s.
India
India’s e-rupee is a pilot. The Reserve Bank of India’s annual report for 2025 to 2026 puts retail e-rupee circulation at 771.7 crore rupees at March 31, 2026, against 1,016.5 crore a year earlier. The wholesale version stood at nil at both dates, which press reports attribute to end-of-day redemption. The RBI cautioned, as quoted in the press, that balances need not reflect transaction volumes. Press reports of the annual report describe expanded benefit-transfer pilots and plans for cross-border pilots.
Brazil and Sweden
Brazil’s Drex project began as a blockchain-based effort. According to press reports, its central bank coordinator said in August 2025 that the first phase would drop blockchain and focus on credit and collateral uses. A central bank statement could not be obtained, so Drex is not classified here.
In its Payments Report 2026, the Riksbank recommended on March 12, 2026 that the Riksdag and government set up an inquiry on an e-krona. That is a preparation step, not a decision to issue.
The Digital Euro
The digital euro is the closest comparator for a Western democracy with strong privacy law. The Commission proposed it in 2023 and the Council agreed its negotiating position on December 19, 2025. On July 9, 2026, the European Parliament voted 416 to 169 to authorize interinstitutional negotiations on the digital euro proposal. Trilogue negotiations began on July 13, 2026 and were continuing at the cutoff, with the institutions aiming for agreement by the end of 2026. The ECB has described a pilot in 2027 and possible first issuance in 2029 as planning assumptions that depend on the legislation being adopted.
The Commission’s proposal (COM(2023) 369) defines a “conditional digital euro payment transaction” as one instructed automatically when conditions agreed by payer and payee are met (Article 2(17)), and defines “programmable money” separately as units of digital money with an intrinsic logic that limits each unit’s full fungibility (Article 2(18)). Article 24 provides that the digital euro itself shall not be programmable money. A November 2025 Council working draft keeps both definitions, and press reports say Parliament’s position also rules out programmable money; the final mandates were not compared article by article. Conditional payments are an optional service the user controls, while programmable money restricts the currency itself. The European data protection authorities’ joint opinion welcomed some privacy features while recommending stronger safeguards. None of this is law yet.
Economic and Sovereignty Analysis
The central economic argument against a retail CBDC is deposit disintermediation: households might move deposits out of banks into a safe claim on the central bank, especially in a crisis. Designs respond with holding limits, zero interest and tiered rates. The Bank of Canada staff modelling described above suggests banks stay resilient in a severe recession under a non-interest-bearing CBDC with limits, a result under stated assumptions and not a forecast. Arguments for include resilience in outages, offline capability, competition and keeping public money available as cash declines. Arguments against include privacy risk, bank funding effects, cost and fast private rails.
Sovereignty cuts both ways: a domestic CBDC could reinforce monetary sovereignty if foreign stablecoins displace the Canadian dollar, while one that eroded trust in privacy or governance could weaken confidence in institutions.
Where Architecture Would Materially Change Visibility and Control
Neutrality should not become vagueness. Several statements follow from the evidence.
A centralized, identity-linked, account-based CBDC would give one institution a complete ledger of retail payments. That is materially more visibility than Canada has today, where payment data is dispersed across banks, networks and merchants, each reachable only through its own legal process. A two-tier design with intermediaries holding identity would leave visibility roughly where it is now, in banks, while potentially limiting what the central bank sees. Token-based or blind-signature designs could reduce visibility below that of bank money, but they depend on caps, policy and engineering not proven at national scale.
Control differs from visibility. A single platform’s ability to apply a uniform restriction would be a capability, not an authority, and the law would decide who could use it. Safeguards exist: statutes could bar programmable restrictions, as the digital euro proposal does, and Charter review has already been applied to financial restrictions.
The public benefits are real: resilience, offline payment, competition, inclusion and a public alternative to private platforms. So are the concentration risks of a single operator, a single point of failure and a single point of pressure.
Three Scenarios for the Next Five to Ten Years
These are thought experiments, not predictions. No probabilities are assigned.
Scenario A: No retail CBDC. Research continues, Parliament does not legislate, and private rails such as the Real-Time Rail, regulated stablecoins and tokenized deposits carry payment innovation.
Scenario B: A limited CBDC. Parliament authorizes a retail or hybrid product with holding limits, statutory privacy protections and offline capability.
Scenario C: Expanded government digital money. A broader program extends to government payments or restrictions on use. This would need legislation and face Charter, privacy and political scrutiny. No such proposal exists in Canada at the cutoff.
The Sovereign Canadian Perspective
Financial sovereignty, one part of personal sovereignty as used on this site, means individuals can access, transfer and use their money under predictable rules. Four practical questions apply under every scenario. Access: does the person have more than one working banking relationship? Cash: is some physical cash available for ordinary use, recognizing that acceptance is a commercial matter in Canada? Counterparty risk: which institutions hold the money, and how are they supervised? Rules: are limits on freezing, reporting and data sharing set out in statute, subject to judicial review and stable enough to plan around?
Privacy and secrecy are different things. Privacy means appropriate limits on who can see personal financial information. Secrecy means concealment from legitimate authorities, which this article does not advocate. Canadians remain subject to tax and reporting obligations on every form of money.
What to Watch
Over the next year the most informative developments will be the euro-area trilogue outcome, Canadian stablecoin regulations, Real-Time Rail uptake, the Supreme Court of Canada’s handling of the Emergencies Act appeal, the rest of the GENIUS Act rulemaking and any Bank of Canada research update.
About the Sources
Statutes, regulations, the enacted United States provisions, Parliament’s record of Bill C-15, the Federal Court of Appeal’s reasons, the Supreme Court of Canada dockets, the Bank of Canada’s consultation report and 2024 remarks, the Riksbank’s Payments Report 2026, the Reserve Bank of India’s annual report and the Commission’s digital euro proposal, as reproduced in Council documents, were read in their official texts. Figures for China, Jamaica and the Bahamas are central bank statements as reported by news outlets, the China restructuring rests on official media reports because the action plan itself was not obtained, and the Stablecoin Act’s content and the Real-Time Rail by-law date rest on law-firm commentary. The scope of the American restriction for designs without a distributed ledger, and several Canadian statutory questions, are unsettled. This article is general information, not legal advice.