Last summer, the central bank revealed it is working with the country's biggest banks, Payments Canada and the R3 consortium on a DLT experiment called Jasper that uses a digital fiat currency dubbed Cad-Coin.

Now, in an article for the Globe and Mail, Carolyn Wilkins, senior deputy governor at the Bank of Canada, and Gerry Gaetz, president of Payments Canada write: "Could DLT underpin an entire wholesale payment system? The answer is maybe one day, but there remain many hurdles to overcome."

These hurdles include the need for privacy and scalability, which mean that "the bottom line is that a stand-alone DLT wholesale system is unlikely to match the efficiency and net benefits of a centralized system. In fact, at its heart, there exists a fundamental inconsistency or tension between a centralized wholesale interbank payment system, as we have now, and the decentralization inherent in DLT.

"At the end of the day, interbank systems must be safe, secure, efficient and resilient, and they must meet all international standards. DLT-based platforms are just not there yet."

Despite the conclusions, Wilkins and Gaetz insist that the Jasper experiment has offered valuable insight into both DLT and the value of public-private sector collaboration, adding: "Our present view is that the biggest net benefits, if any, would likely lie in the interaction of a DLT-based wholesale payments system with broader financial market infrastructure."

In the short term, though, the Canadian financial industry will be sticking to its current payments modernisation roadmap - including the adoption of the ISO20022 message standard and a new core clearing and settlement system - without distributed ledgers.

The bank has also posted a more detailed paper on the project, which you can read here: