The Bank of Canada is looking at the possible adoption of a digital dollar and has found that most participants say they feel well served by current means of payment.
The Canadian central bank has been exploring a digital form of payment, known as a central bank digital currency (CBDC), over the last few years.
This has included research into payment preferences in the area, with a new study published on October 28 titled ‘the consumer value proposition for a hypothetical digital Canadian dollar.’
While there has been rapid digitalization in many industries, the bank has found that while interest exists in a hypothetical digital currency, this does not necessarily translate into adoption.
“Most participants felt well served by current means of payment. Individuals who supported the issuance of a hypothetical Digital Canadian Dollar did not imagine themselves using it regularly.
“When asked, they anticipated using it as a backup payment method or in emergencies,” the report stated.
When diving into the reasons behind this, participants “frequently mentioned the integration of money management tools and ease of online payments as other top-of-mind considerations.
“And they assessed the ability to operate a hypothetical Digital Dollar without an internet connection (i.e., offline) as a desirable feature rather than a critical adoption factor.”
Bank of Canada pulls back on digital dollar
Although most participants in the study had some interest in the notion of a digital form of cash and supported research into it, the likelihood of early adoption is said to be far lower.
The latest study is just one in a number of research carried out by the bank to determine how a digital Canadian dollar could complement banknotes.
While the feedback suggests there is an interest, the Bank has recently stated it will now focus on “major developments that will impact Canada’s payments landscape.
“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.”
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