Canadians have ‘weak incentives’ to use a CBDC: Bank of Canada

cointelegraph.com:

The typical Canadian has little reason to adopt a central bank-issued digital currency, which could cause problems with its broad acceptance, according to a new paper from the Bank of Canada.

In the staff discussion paper released on Aug. 10, the central bank looked at a hypothetical scenario where cash was virtually eliminated in order to see what role a potential CBDC could play in helping the underbanked.

It found that most consumers would have “weak incentives” to use one, as Canadians don't face meaningful barriers to financial services like bank accounts or debit and credit cards.

98% of Canadian adults have a bank account, 87% also have a credit card and 90% of rural and urban households combined can access high-quality internet, the paper said.

It however found that replacing cash with digital loonies would also mean tech-averse Canadians would have fewer payment options while cash-dependent Canadians would find themselves unable to make the most common payments.

The potentially low uptake of CBDCs would also lead to merchants unlikely to want to accept CBDCs which would further diminish their usefulness.

Our latest survey results show that 92% of merchants have no plans to go cashless. Read more results from our survey: https://t.co/DX0lUJ90u7#cdnecon #PaymentMethods #Survey pic.twitter.com/017UYxiIC4

Instead, the paper floated non-CBDC-related ways that could better help the underbanked — including improving internet access, expanding low-cost bank account availability, increasing merchant collaboration with remote communities and continuing to supply cash.

The paper stressed it was not predicting how Canadians would react to a CBDC and said more could be interested in using it due to a variety of reasons.

Even if