The COVID‑19 pandemic continued to affect the Bank’s currency operations in 2021.
Demand for cash returned to normal levels after an unprecedented high in 2020. Meanwhile, the counterfeit rate, at 7 parts per million, remained well below the Bank’s target of 30 parts per million.
The Bank conducted research into the pandemic’s impact on the use of cash and other payment methods. This helped staff gain a deeper understanding of how Canadians’ payment preferences are evolving and provided insight into the potential role of a central bank digital currency.
Meeting Canadians’ demand for cash
The demand for cash returned to more normal levels in 2021 after reaching extraordinary highs in 2020 because of the pandemic. Throughout 2021, the Bank’s Agency Operations Centres and bank note distribution system together ensured the uninterrupted supply of cash to financial institutions across the country.
Conducting research to inform the Bank’s currency function
Bank staff undertake ongoing research to shed light on different aspects of the Canadian payments landscape. In 2021, the impact of the pandemic on the demand for bank notes was a particular focus.
Staff explored the use of cash and digital currencies and conducted surveys to explore how Canadians’ payment preferences are evolving. Notably, survey results indicated that 80% of Canadians intend to continue to use cash over the next five years.
#DYK: In our latest survey on cash demand, 80% of Canadians said they have no plans to go cashless in the next 5 years. #cdnecon #economyhttps://t.co/N2kEqAIyoP pic.twitter.com/4xkIOcdhJR— Bank of Canada (@bankofcanada) August 26, 2021
Other areas of economic research included:
- access to cash in Indigenous communities in Canada
- consumer adoption and merchant acceptance of various payment methods
Staff also conducted laboratory experiments to understand the potential implications if Canada were to adopt a central bank digital currency.
The Bank also continued researching new security features for future bank notes.
Designing the next $5 note
In 2020, eight iconic Canadians were shortlisted to appear on the next $5 bank note. The Minister of Finance will make the final decision on the portrait subject. The new $5 note will be vertical, like the current $10 note, and will be printed on polymer.
On #InternationalWomensDay, meet the women on the short list for the next $5 bank note. https://t.co/qfFG2vHOYD— Bank of Canada (@bankofcanada) March 8, 2021
In 2022, the Bank will:
- expand its research on the use of cash and digital currencies
- further build its capacity to issue a central bank digital currency, should the need arise
- continue its research into security features for future bank notes
- continue work on the next $5 bank note, subject to a final decision by the Minister of Finance on the portrait subject
Cash and COVID-19: The Impact of the Second Wave in Canada
An Exploration of First Nations Reserves and Access to Cash
Consumer Cash Withdrawal Behaviour: Branch Networks and Online Financial Innovation
Bitcoin Adoption and Beliefs in Canada