Bank of Canada finds ‘significant’ barriers to CBDC implementation

The Bank of Canada is “committed” to being ready to move on a CBDC “should the need arise”


Canadian President Justin Trudeau | Art Babych/Shutterstock modified by Blockworks


The Bank of Canada stated on Thursday that “significant” barriers remain in the implementation of a useful central bank digital currency (CBDC).

In another research paper on CBDCs, the BOC also highlighted that there’s still a lot of uncertainty around possible adoption if Canada were to pursue a CBDC.

“Nevertheless, even if there were greater market interest than we suggest, the two-sided payment market barriers facing broad-based adoption and use — which would be required for a CBDC to be useful — appear to be significant,” it said.

However, the Bank reiterated that it is “committed to being ready to provide a CBDC should the need arise.”

Outside of payment barriers, the bank also noted that alternatives exist to address the payment needs of Canadian citizens. The majority of the population resides in urban areas with access to the internet, but the bank found that “internet access in remote areas is relatively poor.”

Cash dependence could become an issue if a CBDC is issued as a move toward a cashless society, as some Canadian citizens rely more on cash than e-transfers or debit or credit cards. 

That feeds into any group that seems to be technology averse, who are already reluctant to make payments or purchases online.

If the Bank of Canada were to introduce a CBDC, it says that these consumers “will also likely face relatively high adoption costs.”

Though it notes that the group might also be made up of those “who might benefit most from a CBDC” because of the issues the consumers face in “meeting their payment needs in a cashless environment” if Canada were to go fully cashless. 

“In sum, a large majority of Canadians have access to and use a range of payment methods, but a small share of the population faces constraints or has preferences that limit their use of certain payment methods,” the Bank of Canada said.

Overall, the Bank of Canada found that the “typical consumer has access to cash, bank accounts, and debit and credit cards and does not face meaningful barriers to accessing financial services or payment methods.”

The BOC will continue to conduct “more granular market research” on CBDC interest and to better understand how it could interact with consumers.

A July survey of 1,500 Canadians did find that a slim majority were willing to use a CBDC if it were introduced, though only 5% were strongly interested in it.

The Bank of Canada announced its consultation on a CBDC back in May, acknowledging that it doesn’t need a digital loonie yet but wanted to be prepared.

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