What would a central bank digital currency mean for Canada? We ask 5 experts

The creation of a CBDC would not change my advice to Canadians when it comes to making decisions online. It would remain just as important—if not more so—to think rationally rather than emotionally and to question every opportunity that sounds too good to be true.

Kathy Macdonald, M.O.M., MSc., is a retired police officer with over three decades of investigative and crime prevention experience. She is the author of Cybercrime: Awareness, Prevention, and Response and a member of the Order of Merit of the Police Forces. She was named one of the Top 20 Women in Cyber Security in Canada.

An opportunity to expand financial inclusion?

With more and more businesses going cashless, and the risk that alternative digital currencies may undermine our monetary sovereignty, the Bank of Canada is preparing for the possible introduction of a CBDC.

In the face of these risks, a safe, stable and universally accessible CBDC would be a welcome complement to cash. Even without these pressures, however, it could offer immediate benefits to Canadians in rural, remote, Indigenous and low-income communities who are currently unable to access digital payments because they are digitally and/or financially excluded.

According to a 2022 Deloitte report, where you live in Canada determines your access to minimum broadband speeds. These speeds are only available to 46% of rural households, 35% of First Nations communities and 53% of households with incomes under $40,000. While most Canadians also have bank accounts, some low-income people do not use them due to unpredictable fees and/or fear of funds being seized by creditors. Members of some Indigenous communities are also less likely to be banked due to poor access to mainstream financial institutions and other barriers. A CBDC could enable access to digital payments for all of these groups.

The Bank of Canada has committed to universal accessibility as a key governing principle for any future CBDC. It is actively exploring options for a digital currency and Universal Access Device that are fully functional without internet access. The BoC has also committed to a design methodology aimed at understanding user groups through extensive consultation, analyzing their specific needs, considering multiple design options, and developing prototypes for early feedback and improvements. This “inclusive by design” approach, commitment to universal access, and leveraging of innovative new technologies offers real hope that any future CBDC will mean greater financial inclusion, lower financial costs, and more economic opportunity for Canadians who are currently excluded from our digital payments system.

Elizabeth Mulholland is CEO of Prosper Canada, a national charity dedicated to expanding economic opportunity for Canadians living in poverty.

There’s no need for a digital dollar right now

Canadians are increasingly moving away from physical currency towards digital transactions and payments. As a share of total transaction volume, the use of cash as a payment method fell from 27% in 2016 to 10% in 2021. Over the same timeframe, online transfers grew from 1% to 5% of total transaction volume. 

In addition to addressing this behavioural shift, there is hope the creation of a digital dollar could ensure all Canadians participate fully in the economy. For example, a CBDC could act as a digital wallet for individuals without the means to open an account or credit card with a bank, and allow them to complete online transactions.