Research conducted by the Bank of Canada indicated mixed opinions regarding Canada’s digital dollar.
Consumers in Canada were somewhat skeptical of the possibility of early widespread adoption of the digital dollar concept by the Bank of Canada.
The Bank of Canada research paper, released on October 28, highlighted Canadians’ long-standing affinity for traditional payment systems, which have historically been tied to fiat money, amid growing support for the issuance of the digital Canadian dollar.
According to a July survey by the Bank of Canada, Canadians opt to make payments with either cash or cards for everyday purchases. Less than 3% of Canadians have used bitcoin or other cryptocurrencies to make payments on a daily basis since 2022.
Interest in CBDC does not mean adoption
In contrast, about 42% of participants in the latest survey had initially positive impressions of a hypothetical Canadian digital dollar, and only about 20% of participants either “disliked” or “hated” the idea outright. The remaining 38% took a more neutral stance or stated that there was a lack of understanding of this kind of technology.
Although survey participants were open to the possibility of issuing CBDC as a way to address the limitations of fiat-based payments, “interest does not mean adoption,” the report notes.
Participants noted that a digital dollar required a demonstration of flawless reliability from day one for there to be widespread early adoption. Other expectations included ease of use, privacy of private information, security of transaction data, convenience, and an engaging and superior user-level experience.
The majority of respondents stressed that offline functionality was not a key driver of adoption, and argued that they would prefer to use cash in emergencies.
Canadians require CBDC to outperform traditional cash system
In addition to developing a better payment system, the Bank of Canada believes that a considerable investment and awareness campaign is needed to drive the adoption of a digital Canadian dollar.
The BoC has recently said it is scaling back its work on the retail central bank digital currency along with shifting its focus to much more payments system research and policy development.
Countries such as Australia and Colombia have also paused their plans to launch their corresponding internal CBDCs.
