Bank of Canada report: Canadians have 'insufficient incentive' to use CBDC

Odaily Planet Daily News According to a new paper from the Bank of Canada, Canadians have no reason to adopt the digital currency issued by the central bank, which may lead to the central bank digital currency (CBDC) not being widely accepted. In a staff discussion paper published on August 10, the central bank examined a hypothetical scenario where cash is all but eliminated to see what role a potential CBDC could play in helping the underserved by banks. The survey found that most consumers have "weak" incentives to use a central bank digital currency, as Canadians have no significant barriers to accessing financial services such as bank accounts, debit and credit cards. According to the report, 98 per cent of Canadian adults have a bank account, 87 per cent have a credit card, and 90 per cent of rural and urban households have access to high-quality internet. However, the report found that replacing cash with digital currencies will also mean that tech-averse Canadians will have fewer payment options, while Canadians who rely on cash will find themselves unable to make the most common payments. The potentially low adoption rate of a CBDC would also make merchants less likely to accept a CBDC that would further reduce its usefulness. The report stresses that it is not trying to predict how Canadians will respond to a CBDC, but instead suggests that more people are likely to be interested in using a CBDC for a variety of reasons. But the paper also added that the barriers to widespread CBDC adoption by users and merchants "appear to be substantial." (Cointelegraph)