We use money to pay for goods and services. Canadians are using digital money more than ever before, but cash still plays an important role in our economy.
All money shares certain features
Money is:
- a unit of account—a measure of value that allows you to easily compare prices
- a store of value—an asset that retains its value over time
- a medium of exchange—an instrument that you can use to buy goods and services
Any form of money must be:
- interchangeable
- Each unit of money needs to have an identical value to work as a medium of exchange. When every dollar has the same value, the prices of goods and services are easy to understand.
- portable
- You need to be able to carry money with you. Cash is easy to carry. Digital money is portable too. You can access it wherever you have an internet connection.
- durable
- Physical money stays in circulation for many years. It must be able to withstand conditions such as moisture, heat and cold.
- acceptable
- For money to work as a system of payment, we all need to agree it has value.
- scarce
- The quantity of money in the economy needs to be limited for it to have value. If money were freely available in infinite amounts or could be made by anyone on demand, it wouldn’t have value. So, it wouldn’t work as a method of payment.
- secure
- You need to trust in the value of money. We help build that trust. Canadian bank notes have leading-edge security features to stay ahead of counterfeiters. And together with Canada’s bank regulators and deposit insurance providers, we help ensure that Canada’s financial infrastructure can store and move money securely and efficiently.
The Bank of Canada issues and distributes bank notes
The Government of Canada has declared the Canadian dollar our official money, and its value is based on trust in the stability of our government and our economy. Since 1935, the Bank has been the exclusive issuer of Canadian bank notes—the bills Canadians use every day. Our goal is to supply Canadians with bank notes that they can use with confidence—notes that are readily accepted and secure against counterfeiting.
Canadians don’t use bank notes as much as they used to, but four in five Canadians still regularly carry cash. It plays an important role in the economy, and we are committed to ensuring Canadians have access to it.
Cash is:
- universally accessible
- Anyone can use it—including people who don’t have bank accounts, such as persons experiencing homelessness and those living in remote communities.
- resilient
- You don’t need a smartphone or laptop to use cash, and it’s not vulnerable to cyber attacks.
- free to use
- Cash doesn’t have user fees like debit and credit cards do. The low cost of making purchases with cash encourages competition in the financial system.
What about digital money?
Digital money is everywhere. It is the balance sitting in your bank account and the money moving around through electronic transfers, credit card transactions and mobile payments.
At the Bank, we oversee the infrastructure that moves digital payments through systems such as Interac e-Transfer® and major credit card networks. We also supervise retail payment service providers who help people store or move money electronically.
It’s important not only that Canadians can benefit from new payment technologies and services but also that this kind of money is as trustworthy and secure as possible.
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