Bank of Canada admits a central bank digital currency isn’t likely to work – LifeSite

OTTAWA, Ontario (LifeSiteNews) –– The Bank of Canada (BOC) has said that the creation of a central bank digital currency (CBDC) is not needed as many people rely on “cash” to pay for things, and that the introduction of a digital currency would only be feasible if consumers demanded its release. 

“Currently, most Canadian consumers do not experience gaps in their access to payment methods, and this will likely remain the case in a cashless environment. Some people could, however, face difficulties making payments if cash were no longer widely accepted as a method of payment,” said the BOC in a Staff Discussion Paper titled “Unmet Payment Needs and Central Bank Digital Currency,” which was released on August 10, 2023.  

The BOC, in its “Unmet Payment Needs” discussion paper, noted that as a “practical matter achieving wide adoption” of a digital dollar, “acceptance and use of a central bank digital currency could be challenging because most Canadians have access to several methods of payment.” 

“Overcoming such barriers could require significant and sustained investment by the central bank,” it added. 

The BOC said that Canadians would have to “drive its use” concerning any digital dollar being introduced.  

According to the BOC, a CBDC would have to offer “compelling advantages to motivate these consumers—particularly the typical, well-connected consumers who account for most of the market—to adopt and use CBDC at sufficient scale to generate widespread merchant acceptance.” 

“Without the dominant consumers adopting and using CBDC at scale, merchants are unlikely to undertake the effort and expense to accept CBDC for payments. And that means that consumers with unmet payment needs in this environment cannot benefit from CBDC,” noted the BOC. 

The “Unmet Payment Needs” discussion paper comes only a few months after the BOC asked Canadians for their input on creating a “digital Canadian dollar.”  

As reported by LifeSiteNews in May of this year, the BOC was looking for public feedback on whether such a form of digital currency, which experts have warned could mean an end to purchasing anonymity, would be viable for Canadians. 

Digital currencies have been touted as a way by some government officials to replace traditional cash. 

As noted in a report from LifeSiteNews, experts warn that central bank digital currencies are a “control tool” of governments. 

Just last month, Conservative leader Pierre Poilievre promised that if he is elected prime minister, he would stop any implementation of a “digital currency” or a compulsory “digital ID” system.

The BOC at the time said that any final decision on when and if a digital Canadian dollar is issued would be up to the government. 

The BOC also claims that if a digital Canadian dollar “is issued in the future,” the BOC will continue to “provide bank notes for those who want them.” 

BOC admits that cash is clearly ‘important’ for most Canadians and is not going anywhere  

The BOC in its “Unmet Payment Needs” discussion paper acknowledged that cash is important, especially should disaster strike, and thus, it is unlikely to go anywhere soon. 

“Without cash, a widely used offline method of payment available for any consumer segment would no longer exist, which could be especially important if a network or power outage occurred,” noted the BOC. 

While the BOC said that such a scenario is “unlikely,” it also said that “some people could, however, face difficulties making payments if merchants no longer generally accepted cash as a method of payment.” 

As noted by the BOC in its paper, only about 13 percent of Canadians own Bitcoin, and “Ownership and use of other crypto instruments for payments is even less significant.” 

According to the BOC only a small number of Canadians, “about 14 percent,” have abandoned the use of cash to buy things. 

“About half of these people still carry some cash presumably as a precaution,” the researchers noted.  

Most Canadians, some 98 percent, have a bank account with a debit card, while 87 percent of Canadians have at least one credit card.  

The researchers noted that a significant number of Canadians “dislike using technology and are therefore reluctant to make payments online.”  

According to the BOC, only about five percent of Canadian retailers have stopped taking cash as payment, further indicating that support for a CBDC is lacking. 

Many retailers in Canada stopped taking cash as payment during COVID shutdowns, however, since restrictions were eased, many again began to accept physical money.