Key Takeaways
- The report noted that interest exists in a hypothetical digital currency, but fewer people are enthusiastic about real-world adoption.
- In September, BOC decided to pause further efforts on a retail CBDC
The Bank of Canada (BOC) recently released a study revealing Canadian consumers’ reservations about adopting a central bank digital currency (CBDC). This comes as the BOC explores a digital Canadian dollar, aiming to gauge public interest and address consumer expectations.
The bank in its report titled ‘The consumer value proposition for a hypothetical digital Canadian dollar’ found that interest exists in a hypothetical digital currency, but fewer people are enthusiastic about real-world adoption.
In a survey conducted in July, the BOC found that cash and credit cards remain Canadians’ favored payment methods. Fewer than 3% of respondents have used cryptocurrencies like Bitcoin for day-to-day purchases, indicating limited comfort with digital alternatives.
Still, the concept of a digital dollar sparked curiosity, with 42% of participants expressing a favorable initial impression. By contrast, 20% voiced outright opposition, and the remainder took a neutral stance or indicated they were unfamiliar with the technology.
For widespread adoption, Canadians highlighted specific requirements for a potential CBDC, including user privacy, ease of use, and high security for transactions.
Participants noted that a digital dollar would need to “demonstrate flawless reliability from day one,” pointing to a need for seamless functionality and consumer trust in any new currency format. Despite potential interest, the BOC emphasized in the report that enthusiasm does not equate to adoption unless the digital currency meets these high standards.
When asked about offline capabilities for a digital dollar, many respondents indicated that cash would remain their preferred backup during emergencies. This preference reflects a view that while a CBDC might be useful for some transactions, it wouldn’t fully replace cash as a reliable option.
The Bank of Canada acknowledged that while developing a digital dollar is a potential path forward, it would require robust public engagement and investment in consumer awareness. This aligns with the BOC’s decision in September to pause further efforts on a retail CBDC, citing the need for additional study and alignment with public opinion.
“The Bank will continue to monitor global retail CBDC developments and publish some related research, but the focus will be on preparing for the evolution of payments both in Canada and around the world, through policy research and analysis”, the bank said. The central bank is now focused on “major developments that will impact Canada’s payments landscape.”
In recent years, Canada has been more cautious about digital currency development compared to other countries that have moved swiftly on CBDCs. According to the BOC’s latest report, future steps will depend on Canadians’ readiness and the bank’s ability to meet expectations around privacy, security, and reliability.