A new study by the Bank of Canada (BOC) has raised questions over the future success and adoption rate of a Central Bank Digital Coin (CBDC) by Canadians.

The central bank’s paper considered whether CBDCs – digital currency issued by a central bank – would address unmet payment needs in a cashless society.

A key pillar of BOC’s findings was that gaps in adult Canadians’ ability to access a range of payment methods was not a widespread issue – with research finding that 98 per cent of Canadian adults have a bank account and a debit card and that 87 per cent also have a credit card. It claimed that such reality would “probably continue” to be the case in a cashless environment.

While BOC added that making payments could become a challenge for some people if merchants at large ceased to accept cash as a method of payment, it pointed out that since the vast proportion of Canadians face few payment gaps, the incentives to adopt and use CBDC at scale would remain “relatively weak”.

It added that weak incentives also meant that widespread merchant acceptance of CBDC would be unlikely.

Recent research from the Bank for International Settlements (BIS) indicated there could be 24 CBDCs in circulation globally by 2030.

BIS surveyed 86 banks and found that almost a fifth had plans to issue a retail CBDC in the near future.

BIS also found that in 2022, 93 per cent of central banks around the world engaged in some form of CBDC analysis, concluding that in the short term the majority of central banks’ hesitancy about the future of CBDC’s was fading.

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