Staff working papers

Central bankers argue that programmable digital currencies may compromise the uniformity of money. We develop a stylized model to examine this argument and the trade-offs involved in circulating programmable money.

This paper explores the implications of introducing digital public and private monies (e.g. tokenized central bank digital currency [CBDC] or tokenized deposits) for stablecoins and illicit crypto transactions.

Using a general equilibrium model with nominal rigidities and financial frictions, we explore whether introducing a central bank digital currency (CBDC) affects the transmission of monetary policy, and how the effects depend on CBDC design features. We also study whether paying interest on central bank liabilities is contractionary or expansionary.

We build a network formation game of firms with trade flows to study the adoption and usage of a new digital currency as an alternative to correspondent banking.

To what extent does a central bank digital currency (CBDC) compete with bank deposits? To answer this question, we develop and estimate a structural model where each household chooses which financial institution to deposit their digital money with.

Digital payments and decentralized systems enable the creation of new financial products and services for users. One core challenge in digital payments is the need to protect users from fraud and abuse while retaining privacy in individual transactions. We propose a pseudonymous credential scheme for use in payment systems to tackle this problem.

We report on the dynamics of Bitcoin awareness and ownership from 2016 to 2021, using the Bank of Canada's Bitcoin Omnibus Surveys (BTCOS). Our analysis also helps understand Bitcoin owners who adopted during the COVID-19 and how they differ from long-term owners. 

Globalization is in retreat, yet digitalization is on the rise. How will these trends impact inflation?

We consider introducing an expiry date for offline digital currency balances. Consumers whose digital cash expired would automatically receive the funds back into their online account. This functionality could increase demand for digital cash, with the time to expiry playing a key role.

How much of a CBDC would Canadian households want to hold, and what design features of a CBDC would they care about?