A new Bank of Canada staff discussion paper explored the likely uptake of a retail central bank digital currency (CBDC). In Canada 98% of adults have a bank account and card penetration is high. Hence for most citizens the roll out of a CBDC is unlikely to address unmet payment needs, given there are few. A tepid CBDC adoption would mean that few merchants would support a digital Canadian dollar.
The Bank of Canada’s staff focused on the CBDC trigger of a cashless society. This is one declared motivator for potentially launching a CBDC, with the other being widespread payment usage of crypto or a foreign currency. Either way, the authors highlight the need to sustain some level of cash usage in the digital age to support a crisis such as power outages.
The paper explores various consumer personas in the payment space, including the cash dependent and the technology averse. Around 5% of Canadians are heavy cash users ,and 7% own prepaid cards often bought with cash. These consumers either use cash because they find other avenues too expensive or they prefer the privacy of cash.
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