A Bitcoin Standard: Lessons from the Gold Standard Staff Working Paper 2016-14 Warren E. Weber This paper imagines a world in which countries are on the Bitcoin standard, a monetary system in which all media of exchange are Bitcoin or are backed by it. The paper explores the similarities and differences between the Bitcoin standard and the gold standard and describes the media of exchange that would exist under the Bitcoin standard. Content Type(s): Staff research, Staff working papers Topic(s): Digital currencies and fintech, Exchange rates, Financial services, Inflation and prices JEL Code(s): E, E4, E41, E42, E5, E58
On the Essentiality of E-Money Staff Working Paper 2015-43 Jonathan Chiu, Tsz-Nga Wong Recent years have witnessed the advances of e-money systems such as Bitcoin, PayPal and various forms of stored-value cards. This paper adopts a mechanism design approach to identify some essential features of different payment systems that implement and improve the constrained optimal resource allocation. Content Type(s): Staff research, Staff working papers Topic(s): Bank notes, Digital currencies and fintech, Payment clearing and settlement systems JEL Code(s): E, E4, E42, E5, E58, L, L5, L51
Public Policy Objectives and the Next Generation of CPA Systems: An Analytical Framework Staff Discussion Paper 2015-6 James Chapman, Jonathan Chiu, Sajjad Jafri, Héctor Pérez Saiz The payments landscape in Canada is rapidly changing and will continue to evolve, fuelled by strong and persistent drivers. In Canada, the Canadian Payments Association (CPA) is on a path to modernize Canada’s core payment systems. Content Type(s): Staff research, Staff discussion papers Topic(s): Economic models, Financial services, Financial system regulation and policies, Payment clearing and settlement systems JEL Code(s): E, E4, E42, L, L1, L14, L15, L5, L52
Government and Private E-Money-Like Systems: Federal Reserve Notes and National Bank Notes Staff Working Paper 2015-18 Warren E. Weber The period from 1914 to 1935 in the United States is unique in that it was the only time that both privately-issued bank notes (national bank notes) and central bank-issued bank notes (Federal Reserve notes) were simultaneously in circulation. Content Type(s): Staff research, Staff working papers Topic(s): Bank notes, Digital currencies and fintech, Financial services JEL Code(s): E, E4, E41, E42, E5, E58
May 14, 2015 Improving the Foundation of Canada’s Payments System Bank of Canada Review - Spring 2015 Lana Embree, Paul Miller The Canadian payments environment has evolved with enhancements in technology, changes in user expectations and new regulatory standards. In response, the existing regulatory framework and core payments infrastructure are being enhanced. This article describes several revisions to the governance and regulation of the payments system as well as plans to update the core payments infrastructure. These initiatives will position the Canadian payments system to more effectively support a modern and vibrant economy by serving the payments needs of Canadians safely and efficiently as the payments industry continues to evolve. Content Type(s): Publications, Bank of Canada Review articles Topic(s): Financial system regulation and policies, Payment clearing and settlement systems JEL Code(s): E, E4, E42, G, G2, G28
May 14, 2015 The Use of Cash in Canada Bank of Canada Review - Spring 2015 Ben Fung, Kim Huynh, Gerald Stuber The Bank of Canada’s 2013 Methods-of-Payment Survey indicates that the share of cash in the overall number of retail transactions has continued to decrease, mainly because of increased use of contactless credit cards. The share of cash in the total value of retail transactions was virtually unchanged from 2009 to 2013. In particular, the value share of cash transactions above $50 increased. Automated banking machines (ABMs), still the major source of cash for Canadians, were used less often in 2013 than in 2009. Cash use in Canada is broadly similar to that in Australia and the United States. Content Type(s): Publications, Bank of Canada Review articles Topic(s): Bank notes, Digital currencies and fintech, Econometric and statistical methods, Financial system regulation and policies, Payment clearing and settlement systems JEL Code(s): C, C8, C83, E, E4, E42, G, G2, G21, L, L8, L81
The Efficiency of Private E-Money-Like Systems: The U.S. Experience with National Bank Notes Staff Working Paper 2015-3 Warren E. Weber Beginning in 1864, in the United States notes of national banks were the predominant medium of exchange. Each national bank issued its own notes. E-money shares many of the characteristics of these bank notes. Content Type(s): Staff research, Staff working papers Topic(s): Bank notes, Digital currencies and fintech, Financial services JEL Code(s): E, E4, E41, E42, E5, E58
The Neutral Rate of Interest in Canada Staff Discussion Paper 2014-5 Rhys R. Mendes A measure of the neutral policy interest rate can be used to gauge the stance of monetary policy. We define the neutral rate as the real policy rate consistent with output at its potential level and inflation equal to target after the effects of all cyclical shocks have dissipated. Content Type(s): Staff research, Staff discussion papers Topic(s): Interest rates, Monetary policy transmission JEL Code(s): E, E4, E40, E42, E43, E5, E50, E52, E58
Improving Overnight Loan Identification in Payments Systems Staff Working Paper 2014-25 Mark Rempel Information on the allocation and pricing of over-the-counter (OTC) markets is scarce. Furfine (1999) pioneered an algorithm that provides transaction-level data on the OTC interbank lending market. Content Type(s): Staff research, Staff working papers Topic(s): Econometric and statistical methods, Financial markets, Interest rates, Payment clearing and settlement systems JEL Code(s): C, C3, C38, C5, C53, E, E4, E42, E44, G, G1, G10
May 13, 2014 Understanding Platform-Based Digital Currencies Bank of Canada Review - Spring 2014 Ben Fung, Hanna Halaburda Given technological advances and the widespread use of the Internet, various digital currencies have emerged. In most cases, Internet platforms such as Facebook and Amazon restrict the functionality of their digital currencies to enhance the business model and maximize their profits. While platform-based digital currencies could increase the efficiency of retail payments, they could also raise some important policy issues if they were to become widely used outside of the platform. Thus, it is important to closely monitor the evolution of these digital currencies. Content Type(s): Publications, Bank of Canada Review articles Topic(s): Bank notes, Digital currencies and fintech, Financial services, Payment clearing and settlement systems JEL Code(s): E, E4, E41, E42