Demand for Payment Services and Consumer Welfare: The Introduction of a Central Bank Digital Currency Staff Working Paper 2020-7 Kim Huynh, Jozsef Molnar, Oleksandr Shcherbakov, Qinghui Yu Using a two-stage model, we study the determinants of Canadian consumers’ choices of payment method at the point of sale. We estimate consumer preferences and adoption costs for various combinations of payment methods. We analyze how introducing a central bank digital currency would affect the market equilibrium. Content Type(s): Staff research, Staff working papers Topic(s): Bank notes, Digital currencies and fintech, Financial services JEL Code(s): C, C5, C51, E, E4, E42, L, L1, L14, L5, L52
A Uniform Currency in a Cashless Economy Staff Analytical Note 2020-7 Walter Engert, Ben Fung A number of questions can arise when considering the implications of a cashless society. This note considers whether cash is necessary for a uniform currency. Content Type(s): Staff research, Staff analytical notes Topic(s): Bank notes, Digital currencies and fintech, Financial services, Payment clearing and settlement systems JEL Code(s): E, E4, E41, E42, E5
Technology Approach for a CBDC Staff Analytical Note 2020-6 Dinesh Shah, Rakesh Arora, Han Du, Sriram Darbha, John Miedema, Cyrus Minwalla In this note, we highlight a range of technical options and considerations in designing a contingent system for a central bank digital currency (CBDC) in Canada and explore how these options achieve stated public policy goals. Content Type(s): Staff research, Staff analytical notes Topic(s): Central bank research, Digital currencies and fintech JEL Code(s): E, E4, E42, E5, E51, O, O3, O31
Cashless Bank Branches in Canada Staff Analytical Note 2019-29 Walter Engert, Ben Fung Cashless or tellerless bank branches have proliferated in several countries in recent years. In a cashless bank branch, teller or counter services such as cash withdrawals, deposits and cheque-cashing are not available. Content Type(s): Staff research, Staff analytical notes Topic(s): Bank notes, Digital currencies and fintech, Financial services JEL Code(s): E, E4, E41, E42, E5, E51
A Tale of Two Countries: Cash Demand in Canada and Sweden Staff Discussion Paper 2019-7 Walter Engert, Ben Fung, Björn Segendorf Cash use for payments has been steadily decreasing in many countries, including Canada and Sweden. This might suggest an evolution toward a cashless society. But in Canada, cash in circulation relative to GDP has been stable for decades and has even increased in recent years. By contrast, the cash-to-GDP ratio in Sweden has been falling steadily. What has caused this difference? Are there lessons to be learned from comparing the Canadian and Swedish experiences? Content Type(s): Staff research, Staff discussion papers Topic(s): Bank notes, Digital currencies and fintech, Financial services, Payment clearing and settlement systems JEL Code(s): E, E4, E41, E42, E5
Explaining Unusual Cash Patterns in 2018 Staff Analytical Note 2019-22 Walter Engert, Ben Fung, Jozsef Molnar, Gradon Nicholls There was an unusually large decline of bank notes in circulation in October 2018. Some have argued that this was due to the legalization of cannabis in Canada in mid-October. Content Type(s): Staff research, Staff analytical notes Topic(s): Bank notes, Digital currencies and fintech, Financial services JEL Code(s): E, E4, E41, E42, E5, E58
Privacy as a Public Good: A Case for Electronic Cash Staff Working Paper 2019-24 Rodney J. Garratt, Maarten van Oordt Cash gives users a high level of privacy when making payments, but the use of cash to make payments is declining. People increasingly use debit cards, credit cards or other methods to pay. Content Type(s): Staff research, Staff working papers Topic(s): Bank notes, Central bank research, Digital currencies and fintech, Payment clearing and settlement systems JEL Code(s): E, E4, E42, G, G2, G28
Crypto ‘Money’: Perspective of a Couple of Canadian Central Bankers Staff Discussion Paper 2019-1 James Chapman, Carolyn A. Wilkins The market for cryptoassets has exploded in size in the 10 years since bitcoin was launched. The technology underlying cryptoassets, blockchain, has also been held up as a technology that promises to transform entire industries. Content Type(s): Staff research, Staff discussion papers Topic(s): Bank notes, Digital currencies and fintech, Financial services, Payment clearing and settlement systems JEL Code(s): E, E4, E41, E42, E5, E51, E58, H, H4, P, P4, P43
Should the Central Bank Issue E-money? Staff Working Paper 2018-58 Charles M. Kahn, Francisco Rivadeneyra, Tsz-Nga Wong Should a central bank take over the provision of e-money, a circulable electronic liability? We discuss how e-money technology changes the tradeoff between public and private provision, and the tradeoff between e-money and a central bank's existing liabilities like bank notes and reserves. Content Type(s): Staff research, Staff working papers Topic(s): Bank notes, Digital currencies and fintech, Financial services, Payment clearing and settlement systems JEL Code(s): E, E4, E42, E5, E51, E58
Is a Cashless Society Problematic? Staff Discussion Paper 2018-12 Walter Engert, Ben Fung, Scott Hendry The use of bank notes in Canada for payments has declined consistently for some time, and similar trends are evident in other countries. This has led some observers to predict a cashless society in the future. Content Type(s): Staff research, Staff discussion papers Topic(s): Bank notes, Digital currencies and fintech, Financial services, Payment clearing and settlement systems JEL Code(s): E, E4, E41, E42, E5