Canadians do not want a central bank digital currency (CBDC), according to consultations with the Bank of Canada.
After polling 89,423 Canadians, the central bank learned a whopping 85% of respondents would not use the digital dollar if it became available. Only 12% said they would “potentially” use it, whereas the other 3% said they didn’t know.
The Bank of Canada said CBDCs — not to be confused with cryptocurrencies and other digital money — is a digital version of a physical banknote that holds the same value as the national currency.
“CBDCs can have built-in controls so they can discriminate based on age, sex, wealth, race, or whatever other categories the government wants. Bitcoin, on the other hand, has no control built-in so discrimination is impossible,” said The National Telegraph.
“While every CBDC transaction can be tracked and recorded Bitcoin transactions can be done peer to peer and are untraceable to a specific person,” the outlet continued.
Published on November 29, the Bank of Canada asked respondents what conditions, if any, they would consider a CBDC over current payment methods. A resounding 92% said ‘No.’
Another 79% want regulations in place to mandate that merchants accept cash as a form of payment.
However, Canada's post-pandemic economic recovery ushered in a “new normal,” which observed an accelerated usage of digital payment.
“Cash transaction volume fell to fourth position overall in 2020 for the first time and stayed there in 2021,” said the 2022 Canadian Payment Methods and Trends Report.
The report estimated that “only about 14 percent” have abandoned cash purchases, while about half of these people still carry some cash as a precaution.
The typical Canadian carries $70 in their wallet, mainly $5 and $10 bills, and keeps roughly $185 in their vehicle glove box or dresser drawer, confirmed a Bank of Canada report, Unmet Payment Needs And A Central Bank Digital Currency.
In November 2021, the World Economic Forum (WEF) released a compendium document on digital currencies, indicating that central bankers looked to adopt a CBDC.
Regardless of the interest in digital currencies, Canada’s central bank pledged not to phase out cash. “Cash isn't going anywhere,” it said.
“Bank notes, cash are not going away,” said Bank of Canada Governor Tiff Macklem. “Canadians like to use cash and they will be able to continue to use cash.”
According to the feedback received from Canadians, three in five do not trust the Bank of Canada to consider their input on the matter. Eighty-two percent said research into digital currencies should not have taken place.
On November 22, Macklem commented on the prospects of a digital Canadian dollar, contending the decision to implement a CBDC is at the discretion of Parliament.
Nevertheless, he added the central bank is getting ready for the possibility of its adoption.
However, most participants expressed skepticism in a digital Canadian dollar providing any tangible benefits, said the Bank on its engagement with financial institutions.
Several participants from civil society groups concurred that “marginalized” Canadians lack trust in government and financial institutions.
Critics cited privacy and security concerns for their vehement opposition, contending that the government could track their purchases.
“These participants said the design of a digital dollar would need to strike a delicate balance between privacy and security,” added the central bank.
In a 2010 speech, then-Conservative MP Max Bernier expressed concern with digital transactions leaving behind a trail easily traced to the purchaser.
“A digital currency will allow the Bank of Canada — a government organization — to know the details of all our transactions,” said Bernier.
“Whether or not the central bank is serious about protecting our privacy, management, and the Government of Canada will have all this centralized information at their disposal if they want to use it,” he added.
Linked to China’s social credit system, CBDCs are manipulated to fine citizens in a split second for behaviours deemed undesirable. “Dissidents and activists could see their wallets emptied or taken offline,” wrote Time Magazine.
However, University of Calgary economist Trevor Tombe contends Canada has “strong legal frameworks and institutions to protect against that [privacy concerns].”
“If one has concerns about the state of privacy laws in Canada, then make that case directly,” he wrote in a May 18 blog.