Deputy Governor Timothy Lane discusses how the pandemic has accelerated the digitalization of the economy. He explains how this adds even greater urgency to the work the Bank of Canada was already doing to explore a central bank digital currency and improve the way we use and move money.
Canada may need a digital form of cash
The pandemic has made digital services more important than ever, including ways to pay other than cash. The Bank has accelerated its work to prepare for the day when Canada might want to launch a “digital loonie.” Such a currency would be issued only if and when the time is right, keeping the following things in mind:
- A tipping point may be reached where the acceptance of cash sharply declines.
- The use of cryptocurrencies created by the private sector is rising, but they are deeply flawed as methods of payment.
- Only a central bank can guarantee universal access, privacy and complete safety of a digital currency, with public interest as the top priority.
The Bank will continue to explore the possibilities of a digital currency that would be an electronic version of the bank notes that Canadians trust and rely on.”
The way we pay is quickly evolving
Businesses have responded to the pandemic by investing in new technologies that make it easier to pay online. Even when in-person payment is required, contactless methods are growing. The Bank is working with other partners to improve the efficiency of Canada’s core payments systems so that individuals and businesses can exchange funds in real time.
Over the next year or so, these improvements will start to come online. This is important for Canadians because it will mean greater speed, convenience, competition and choice in how people pay for goods and services.”
Cross-border payments need to be easier
Sending money abroad has always been slow and expensive. Issues with cross-border payments affect:
- businesses that want to pay for supplies and services or receive payment for things they sell
- individuals who travel or send money abroad
The Bank is working with other central banks and regulators to make cross-border payments more accessible.
We will push forward with work to make cross-border payments cheaper, easier and safer for people around the globe.”