The "inevitability" of Central Bank Digital Currencies (CBDCs) has recently taken a hit, as multiple countries, including Australia, Colombia, and Canada, have halted their CBDC initiatives, raising questions about the demand for digital fiat currencies.

Previously, the Bank of Canada decided to shelve its digital loonie plans, instead exploring other avenues to support digital payments.

CBC News reporters Kyle Bakx and Meegan Read wrote: "The Bank of Canada confirmed to CBC News that it has shifted its focus away from the idea of introducing a digital loonie, which could be used for online shopping and transfers."

The Bank of Canada stated in an email to news media: "The bank has conducted extensive research to understand the impact of retail central bank digital currencies, including exploring the implications of a digital dollar on the economy and financial system, as well as the technical methods for providing a secure and accessible digital form of public money."

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The report noted that the central bank will instead focus on "preparing for the ongoing evolution of payments in Canada and around the world through policy research and analysis."

Now, Australia and Colombia have joined Canada in stopping their CBDC plans, as they believe existing private sector options are currently serving the public well.

The Reserve Bank of Australia (RBA) stated in a recent report: "There is no clear public interest case for issuing a retail CBDC in Australia at this time." "The main motivations for jurisdictions that have issued retail CBDCs (only emerging market economies) or indicated a clear likelihood of issuing retail CBDCs in the coming years resonate less in the Australian context, at least for now."

The RBA added: "This suggests that Australians are currently well-served by the retail payment system, which is efficient, innovative, and secure by global standards." "However, there are many potential benefits and costs to consider, and we will revisit this assessment as more information emerges, including lessons learned from the experiences of other jurisdictions."

Although the investigation is temporarily suspended, the RBA has left the door open for future exploration if necessary. They stated: "By committing to a forward-looking work program that covers the next three years, the Reserve Bank of Australia and the Treasury will work closely together to deepen their understanding of key policy issues related to retail CBDCs and support any future deliberations by the Australian government on related matters."

The report noted: "The work program will include seeking broader insights and perspectives on the merits of an Australian retail CBDC and will be informed by a structured public engagement process starting from 2025." "The Reserve Bank of Australia and the Treasury will also establish industry and academic advisory forums starting next year, and the Reserve Bank will conduct further experimental and practical research building on last year's pilot work."In Colombia, the Bank of the Republic of Colombia (BRC) has released a report stating: "Analysis conducted by the Central Bank of the Republic of Colombia indicates that there is currently no justification for issuing a retail Central Bank Digital Currency (CBDC) in Colombia. The potential benefits can be achieved through alternative policies. In particular, Colombia has updated regulatory provisions to encourage competition and enhance market transparency."

The central bank added: "Likewise, the Republic Bank has taken on the responsibility of promoting interoperability of instant electronic payments by developing centralized infrastructure and its regulation." "Instant electronic payments have the potential to reduce dependence on cash and cover the majority of the population at a low cost. In the future, as has already occurred in some parts of the world, interconnecting the national instant payment infrastructure with that of other jurisdictions and improving cross-border payments will be feasible."

The British Retail Consortium stated that the issuance of a retail CBDC would only be considered if "the economic benefits outweigh the implementation costs, including the costs of adverse risks during the implementation process; and its issuance is superior to other strategies for addressing challenges in the payment ecosystem."

The report concluded: "The issuance of retail certificates represents significant operational and reputational risks, with no use case guaranteeing its contribution to well-being, nor clearly demonstrating its effectiveness over the Republic Bank's current strategy of strengthening instant payments." "The above considerations lead us to conclude that there is insufficient justification for issuing a CBDC (retail or wholesale) in Colombia at this time."

Nicholas Anthony, a policy analyst at the Cato Institute's Center for Monetary and Financial Alternatives and a researcher at the Human Rights Foundation, stated, "It is correct that Australia, Canada, and Colombia have paused their CBDC plans."

In a column for Cointelegraph, Anthony noted: "For years, critics of CBDCs have been writing about financial privacy, freedom, and market risks." He cited Norbert Michel from the Cato Institute, who has long warned that "CBDCs will give federal officials complete control over the funds entering and leaving every individual's account."

"Elsewhere, Natalie Smolenski and Dan Held from the Bitcoin Policy Institute wrote, 'Bitcoin and stablecoins have already well-covered the rationale for implementing CBDCs,'" he said. Dante Disparte from Circle wrote: "With CBDCs, central banks will have a backdoor to your bank account and the means to monitor every digital transaction."

"Speaking of CBDCs, the costs far outweigh the benefits," Anthony claimed. "However, despite long-standing criticism, the official stance of central banks against the launch of CBDCs is relatively new. Yes, there have been individual objections from time to time. Yet, the official stance is extremely rare."

He emphasized that the Human Rights Foundation's CBDC tracker shows that 132 jurisdictions have initiated CBDC investigations, but he said, "Few jurisdictions have changed course. In fact, they have been explicitly told not to do so."

Anthony pointed out: "Around this time in 2023, IMF Managing Director Kristalina Georgieva described the rise of CBDCs as a 'voyage' requiring 'courage and determination' as policymakers 'boldly face the open waters.'" "She warned that 'now is not the time to turn back' and said, 'if anything, we need to raise the sails again to speed up.'"He emphasized: "However, news from Australia, Canada, and Colombia indicates that not everyone supports Central Bank Digital Currencies (CBDCs)—or the International Monetary Fund's plans in this regard." "These recent statements from the central banks are by no means a final decision on the matter."

Anthony concluded: "History shows that crises can quickly lead to fundamental changes in the way governments operate, and everything these central banks say is not binding." "However, this news is a welcome change of pace. If nothing else, this news indicates that CBDCs may not be as inevitable as some people imagine."