- Most Canadians find limited incentive to adopt a Central Bank Digital Currency (CBDC) due to readily available financial services.
- Despite discussions around CBDCs, the relevance and importance of physical cash remain vital, especially for offline transactions.
Recent findings from the Bank of Canada, corroborated by reports from Cointelegraph, shed light on the reluctance of Canadians to readily adopt a Central Bank Digital Currency (CBDC). Let’s delve into why the digital ‘loonie’ isn’t enticing enough for the majority of the country’s population.
Our latest survey results show that 92% of merchants have no plans to go cashless.
— Bank of Canada (@bankofcanada) August 8, 2023
Filling a Non-existent Gap?
While the globe witnesses a surge in digital currencies, Canada paints a different picture. About 98% of its adult populace holds a bank account, with 87% and 90% having access to credit cards and high-quality internet, respectively. This essentially means that Canadians already have a robust financial infrastructure. Introducing a CBDC might not offer substantial benefits to incentivize its adoption.
The Importance of Widespread Acceptance
For a CBDC to truly thrive, merchant adoption is paramount. But if most Canadians see no significant advantage in utilizing a CBDC, merchants might not find it worthwhile to incorporate it into their transaction methods. This poses a chicken and egg problem: consumer use is necessary for merchants to accept CBDCs, and vice versa. However, the current landscape suggests that this cycle may be challenging to initiate.
Challenges for the Less Tech-Savvy and Cash-Dependent
Replacing traditional cash with digital alternatives might alienate specific demographics, notably the tech-averse and those who primarily rely on cash transactions. Such individuals would find themselves cornered, with diminished payment avenues.
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Is Cash Really Outdated?
Contrary to the digital age’s narrative, cash holds a significant role, especially during offline emergencies – think power outages or extreme weather events. Recognizing this, the Bank of Canada emphasizes the systemic benefits of promoting digital payment solutions that can operate offline and the consistent value of maintaining cash circulation.
Interestingly, while the discussions around CBDCs gather steam, the paper accentuates that the Bank of Canada remains committed to providing cash as long as there’s demand. The actual roll-out of a CBDC would either be in response to an entirely cashless society or the prevalent use of foreign CBDCs or cryptocurrencies like Bitcoin.
So, while the world closely watches the dance of digital currencies, Canadians seem content, for now, with their present financial tools – maybe giving the likes of Monero, Dash, and ZCash a closer look instead.