Any Link Between Cash Holdings and Bitcoin Ownership?

The Bank of Canada (BOC) has issued a paper investigating the relationship of Bitcoin owners with cash ¹.

The paper is written in the context of understanding whether private digital currencies will make serious inroads into the use of cash, particularly for transactions. This is one of two criteria given in a speech in February 2020 by the Deputy Governor when considering potential reasons to issue a Central Bank Digital Currency (CBDC). The other was if cash demand falls to negligible levels.

In Canada cash usage for transactions has fallen, but is holding up strongly in some demographics and for some transactions. Canada has a very similar payment infrastructure to Sweden, yet Canada’s cash usage cannot be described as negligible while Sweden’s can. This paper cited different legal status of notes and banking regulations relating to secure deposits in the two countries.