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The potential effect of a central bank digital currency on deposit funding in Canada

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A retail central bank digital currency denominated in Canadian dollars could, in theory, create competition for bank deposit funding. We look at the potential implications increased competition for deposit funding could have on income and liquidity for the six largest Canadian banks, using regulatory data from 2018 and 2019.

DOI: https://doi.org/10.34989/san-2020-15