The Canadian payments landscape continued to evolve in 2022. The Bank of Canada closely monitored these changes, using the insights from its economic and policy research to inform its work while providing Canadians with bank notes they can use with confidence.

Currency is one of the Bank’s five main areas of responsibility. Learn more about the Bank’s core functions.

Meeting demand for cash with bank notes Canadians can trust

The bank note distribution system and the Bank’s Agency Operations Centres continued to supply financial institutions with bank notes to meet the demand for cash. Roughly 3.0 billion bank notes were in circulation in 2022; this is 2.2% more than were in circulation at the end of 2021.

Around 96% of Canadians expressed confidence in the bank notes they use. This sentiment corresponds with the low counterfeiting rate of 6 parts per million (PPM)—well below the Bank’s benchmark of 30 PPM.

Informing decisions through research and outreach

The Bank pursued a variety of research projects to better understand:

  • Canadians’ payment preferences
  • Canadians’ access to bank notes
  • the role of cash in the financial system
  • what a central bank digital currency could mean for Canada
  • trends in the use of cash before and during the COVID‑19 pandemic
  • the impact of the pandemic on access to bank notes from automated banking machines
  • the experience of people living on financially remote First Nations reserves

The Bank also continued to conduct surveys to understand the perspectives of both consumers and merchants. These surveys shed light on:

  • how Canadians pay for goods and services
  • what methods of payment small and medium-sized businesses accept across the country

The survey results show that Canadians still use cash for a significant share of purchases even though both consumers and merchants rely on electronic payments.

Preparing for a central bank digital currency

In 2022, the Bank continued preparing for the possibility of issuing a central bank digital currency (CBDC), including conducting research and outreach activities. This entailed work related to potential:

  • privacy, security and accessibility issues
  • business models
  • implications for the banking sector

The Bank continued studying cutting-edge technologies that support its goals for privacy, compliance and security. At the same time, it examined high-level architectural approaches that could help frame future design decisions.

The Bank also began expanding CBDC outreach activities with Canadians. It gathered the views of consumers, merchants and financial institutions through surveys and focus groups. As well, the Bank supported the Department of Finance Canada in its legislative review of the digitalization of money, which was announced in the Government of Canada’s 2022 budget.1

The Bank also continued collaborating with other central banks. Notably, it contributed to a report on options for access and the interoperability of domestic CBDC systems.2

Learn more about the Bank’s work on a central bank digital currency, including its outreach with Canadians.

Planning for future bank notes

The Bank continued its research into new security features for future bank notes. This included testing features available on the market and advancing novel security features.

The next step for the new $5 bank note is to select visual design elements and security features to make the note both beautiful and difficult to counterfeit. The Bank will make these decisions once the Minister of Finance chooses the portrait subject.

Finally, as part of its commitment to achieving net-zero operational carbon emissions by 2050, the Bank began exploring how it could reduce the environmental impact associated with producing and distributing bank notes.

The Bank of Canada’s conference centre features a bench made in part from recycled polymer bank notes. Polymer notes that are deemed unfit for circulation are combined with other post-consumer waste to make green products like this one.

Looking forward

In 2023, the Bank will:

  • expand its research on the use of and access to cash and digital currencies
  • continue policy, economic and technical analysis of a potential CBDC, while broadening outreach activities and advancing legislative review work with the Department of Finance Canada
  • continue conducting research into security features to ensure that future bank notes remain resilient against counterfeiters and technology advancements
  • begin working on the design and security features for the next $5 bank note, subject to a final decision by the Minister of Finance on the portrait subject

More information

2021 Methods-of-Payment Survey Report

2021–22 Merchant Acceptance Survey Pilot Study

Private Digital Cryptoassets as Investment? Bitcoin Ownership and Use in Canada, 2016-2021

Cash, COVID‑19 and the Prospects for a Canadian Digital Dollar

Identifying Financially Remote First Nations Reserves

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