Digital currencies and fintech

• Liquidation Mechanisms and Price Impacts in DeFi

  Staff Working Paper 2025-12 Phoebe Tian, Yu Zhu

  This paper theoretically and empirically examines the price impacts of liquidations in DeFi and how different liquidation mechanisms affect the price impacts.

  Content Type(s): Staff research, Staff working papers Research Topic(s): Digital currencies and fintech JEL Code(s): D, D4, D44, D47, G, G2, G20, G3, G33

• Risk-Free Uncollateralized Lending in Decentralized Markets: An Introduction to Flash Loans

  Staff Discussion Paper 2025-6 Jack Mandin

  A flash loan is a special type of uncollateralized loan with zero default risk. I document the use for flash loans across major blockchains that are Ethereum-Virtual-Machine-compatible. Flash loans expand access to liquidity, and highly sophisticated actors use them for many practical applications.

  Content Type(s): Staff research, Staff discussion papers Research Topic(s): Digital currencies and fintech, Financial markets JEL Code(s): G, G0, G1, G2

• Canadian Bitcoin Ownership in 2023: Key Takeaways

  Staff Discussion Paper 2025-4 Daniela Balutel, Marie-Hélène Felt, Doina Rusu

  The Bitcoin Omnibus Survey is an important tool for monitoring Canadians’ awareness and ownership of bitcoin and other cryptoassets over time. In this paper, we present data highlights from the 2023 survey.

  Content Type(s): Staff research, Staff discussion papers Research Topic(s): Bank notes, Digital currencies and fintech, Econometric and statistical methods JEL Code(s): C, C8, C81, E, E4, O, O5, O51

• Tech Reluctance: Fostering Empathy for Canadians Facing Challenges with Digital Systems

  Staff Discussion Paper 2025-2 Sebastian Hernandez, Helena Wang, Badr Omrane, Vera Roberts, David Pereyra

  We find that individuals who require help performing banking tasks or who are reluctant to adopt technology avoid digital payment systems they expect to lack usability. Addressing these issues through standard accessibility practices, live assistance and thoughtful interface design can enhance user interaction and trust.

  Content Type(s): Staff research, Staff discussion papers Research Topic(s): Accessibility, Bank notes, Central bank research, Digital currencies and fintech, Digitalization, Financial services JEL Code(s): A, A1, A14, C, C9, C90, D, D8, D83, O, O3, O33, Y, Y8, Y80

• Privacy-Enhancing Technologies for CBDC Solutions

  Staff Discussion Paper 2025-1 Rakesh Arora, Han Du, Raza Ali Kazmi, Duc-Phong Le

  Privacy-enhancing technologies (PETs) could offer solutions to safeguard end-user privacy and meet rigorous data protection standards for central bank digital currencies. We consider how PETs can transform privacy design in financial systems and the implications of their broader adoption.

  Content Type(s): Staff research, Staff discussion papers Research Topic(s): Central bank research, Digital currencies and fintech, Financial system regulation and policies, Payment clearing and settlement systems JEL Code(s): E, E4, E42, O, O3, O31

• CBDC in the Market for Payments at the Point of Sale: Equilibrium Impact and Incumbent Responses

  Staff Working Paper 2024-52 Walter Engert, Oleksandr Shcherbakov, André Stenzel

  We simulate introducing a central bank digital currency (CBDC) and consider consumer adoption, merchant acceptance and usage at the point of sale. Modest adoption frictions significantly inhibit CBDC market penetration along all three dimensions. Incumbent responses to restore pre-CBDC market shares are moderate to small and further reduce the impact of a CBDC.

  Content Type(s): Staff research, Staff working papers Research Topic(s): Bank notes, Digital currencies and fintech, Econometric and statistical methods, Financial services JEL Code(s): C, C5, C51, D, D1, D12, E, E4, E42, L, L1, L14, L5, L52

• The impact of a central bank digital currency on payments at the point of sale

  Staff Analytical Note 2024-27 Walter Engert, Oleksandr Shcherbakov, André Stenzel

  We simulate the impact of a central bank digital currency (CBDC) on consumer adoption, merchant acceptance and use of different payment methods. Modest frictions that deter consumer adoption of a CBDC inhibit its market penetration. Minor pricing responses by financial institutions and payment service providers further reduce the impact of a CBDC.

  Content Type(s): Staff research, Staff analytical notes Research Topic(s): Bank notes, Digital currencies and fintech, Econometric and statistical methods, Financial services JEL Code(s): C, C5, C51, D, D1, D12, E, E4, E42, L, L1, L14, L5, L52

• Familiarity with Crypto and Financial Concepts: Cryptoasset Owners, Non-Owners, and Gender Differences

  Staff Working Paper 2024-48 Daniela Balutel, Walter Engert, Christopher Henry, Kim Huynh, Doina Rusu, Marcel Voia

  Measuring cryptoasset knowledge alongside financial knowledge enhances our understanding of individuals' decisions to purchase cryptoassets. This paper uses microdata from the Bank of Canada’s Bitcoin Omnibus Survey to examine gender differences and the interrelationship between crypto and financial knowledge through an empirical joint analysis.

  Content Type(s): Staff research, Staff working papers Research Topic(s): Central bank research, Digital currencies and fintech, Econometric and statistical methods JEL Code(s): C, C8, C81, D, D1, D14, D9, D91, G, G5, G53, O, O5, O51

• The Consumer Value Proposition for a Hypothetical Digital Canadian Dollar

  Staff Discussion Paper 2024-16 Martine Warren, Bill Laur, Ted Garanzotis, Sebastian Hernandez

  We explore the consumer value proposition of a hypothetical Digital Canadian Dollar, adoption considerations and the users who would benefit most from this potential new payment method. We employ a design-thinking consultation methodology, allowing participants to interact with research prototypes of increasing complexity to reveal user preferences, constraints and adoption influences.

  Content Type(s): Staff research, Staff discussion papers Research Topic(s): Accessibility, Bank notes, Central bank research, Digital currencies and fintech JEL Code(s): C, C9, D, D1, D12, E, E4, E42, E5, E58, O, O3, O33

• Public and Private Money Creation for Distributed Ledgers: Stablecoins, Tokenized Deposits, or Central Bank Digital Currencies?

  Staff Working Paper 2024-35 Jonathan Chiu, Cyril Monnet

  This paper explores the implications of introducing digital public and private monies (e.g. tokenized central bank digital currency [CBDC] or tokenized deposits) for stablecoins and illicit crypto transactions.

  Content Type(s): Staff research, Staff working papers Research Topic(s): Digital currencies and fintech, Financial stability, Monetary policy JEL Code(s): E, E5, E50, E58