Vital Importance of the CBDC Use Case

The Bank of Canada (BOC) has issued a staff discussion paper examining whether or how CBDCs can deliver on the promise of financial inclusion in a cashless society. ¹

BOC has identified two scenarios where Canada might introduce a CBDC. The first is the emergence of a cashless society and the second where there is the widespread use of alternative digital currency, such as Bitcoin, or a foreign CBDC. This paper assumes the former scenario, driven not by any action of BOC but by changes in consumer behaviour. It asks whether a payment focused CBDC could successfully address unmet payment needs.

Based on BOC data and information from Canada’s payment diary, 98% of Canadians have a bank account and a debit card and 87% have a credit card. 90% of households have access to high quality internet (2021 data) and 95% of those 15 years old or older use the internet regularly (2022 data). Bank accounts give people access to the e-Transfer system, pre-authorised payments, online bill paying and cheques.