Coin Edition -
- Bank of Canada reveals most Canadians are not enthusiastic about CBDC adoption.
- Canadians have diverse payment methods, limiting CBDC appeal.
- Majority’s role crucial for CBDC adoption; merchant acceptance relies on demand.
A recent staff discussion paper released by the Bank of Canada sheds light on how Canadians view the idea of a Central Bank Digital Currency (CBDC) as a solution for unmet payment needs in a cashless society. The findings suggest that most Canadians are not particularly enthusiastic about widely adopting a CBDC.
According to the research, the typical Canadian already enjoys access to a variety of payment methods, including cash, debit and credit cards, mobile wallets, and online transfers. Consequently, these consumers don’t see strong incentives to adopt and actively use a CBDC for their transactions.
A CBDC is an electronic form of cash issued directly by a country’s central bank. Unlike cryptocurrencies issued by private entities, CBDC is government-backed and holds the same value as physical cash.
While there is a minority of consumers with unmet payment needs, the study highlights the crucial role of the majority in driving CBDC adoption. If the majority doesn’t see significant benefits in adopting and using CBDC extensively, it becomes unlikely for merchants to accept it widely.
Just last month, the Bank of Canada initiated a public consultation regarding a potential digital Canadian dollar. The survey findings indicate that 59% of Canadians are open to using a digital currency. However, Canadians have expressed privacy concerns regarding CBDCs, including worries about potential fraud (56%), cyber attacks (53%), and the loss of control over personal finances (39%).
Meanwhile, in a global context, research indicates that 130 countries, representing 98% of the global economy, are now exploring digital versions of their currencies. Among them, China is leading in terms of advanced CBDC testing.Conversely, former SEC official John Reed Stark criticized CBDCs, labeling their creation as the “most absurd financial idea in the history of monetary policy.” Additionally, US Presidential candidate Ron DeSantis has pledged to ban CBDC if elected to office.
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