Payment clearing and settlement systems

• An Exploration of First Nations Reserves and Access to Cash

  Staff Discussion Paper 2021-8 Heng Chen, Walter Engert, Kim Huynh, Daneal O’Habib

  Adequate cash distribution is one the Bank of Canada’s core interests. Canadians’ ability to access cash influences the Bank’s thinking on issuing a central bank digital currency. We provide a perspective on these issues by exploring access of First Nations reserves to cash.

  Content Type(s): Staff research, Staff discussion papers Topic(s): Bank notes, Digital currencies and fintech, Financial institutions, Financial services, Payment clearing and settlement systems JEL Code(s): E, E4, E41, E42, E5, G, G2, G21

• An Empirical Analysis of Bill Payment Choices

  Staff Working Paper 2021-23 Anneke Kosse

  How do Canadians pay their bills? 2019 survey data collected from over 4,000 Canadian consumers show how people’s bill payment choices vary with consumer characteristics and types of bills. The data also reveal that many consumers feel limited in their choices, which suggests that preferences of billers might play an important role as well.

  Content Type(s): Staff research, Staff working papers Topic(s): Bank notes, Econometric and statistical methods, Financial services, Payment clearing and settlement systems JEL Code(s): D, D1, D9, G, G2

• Behaviour in the Canadian large-value payment system: COVID-19 vs. the global financial crisis

  Staff Analytical Note 2021-7 Alexander Chaudhry, Anneke Kosse, Karen Sondergard

  Unlike the 2008–09 global financial crisis, the onset of the COVID-19 crisis did not raise stress levels in Canada’s Large Value Transfer System. Swift changes to the Bank of Canada’s collateral policy and its large-scale asset purchase programs likely eased liquidity pressures in the system.

  Content Type(s): Staff research, Staff analytical notes Topic(s): Coronavirus disease (COVID-19), Financial institutions, Financial stability, Payment clearing and settlement systems JEL Code(s): E, E4, E42, E5, E51, E58, E6, E65

• Payments on Digital Platforms: Resiliency, Interoperability and Welfare

  Staff Working Paper 2021-19 Jonathan Chiu, Tsz-Nga Wong

  This paper studies the business model choice between running a cash platform and a token platform, as well as its welfare and policy implications.

  Content Type(s): Staff research, Staff working papers Topic(s): Digital currencies and fintech, Monetary policy, Payment clearing and settlement systems JEL Code(s): E, E4, E5, L, L5

• Stablecoin Assessment Framework

  Staff Discussion Paper 2021-6 Alejandro García, Bena Lands, Dennis Yanchus

  We offer relevant authorities a three-step assessment framework they can use to understand, identify and quantify the risks associated with stablecoin and other cryptocurrency arrangements.

  Content Type(s): Staff research, Staff discussion papers Topic(s): Digital currencies and fintech, Financial institutions, Financial markets, Financial system regulation and policies, Payment clearing and settlement systems JEL Code(s): D, D7, D78, D8, D81, G, G0, G01, G1, G18, O, O3, O38
• February 10, 2021

  Changing how we pay

  Speech summary Timothy Lane Institute for Data Valorisation Montréal, Quebec

  Deputy Governor Timothy Lane discusses how the pandemic has accelerated the digitalization of the economy.

  Content Type(s): Press, Speeches and appearances, Speech summaries Topic(s): Bank notes, Coronavirus disease (COVID-19), Cryptocurrencies, Digital currencies and fintech, Payment clearing and settlement systems
• February 10, 2021

  Payments innovation beyond the pandemic

  Remarks (delivered virtually) Timothy Lane Institute for Data Valorisation Montréal, Quebec

  Deputy Governor Timothy Lane talks about how the Bank of Canada is contributing to the modernization of our payments ecosystem, and how the COVID-19 pandemic has highlighted the need to make payments more convenient for all Canadians.

  Content Type(s): Press, Speeches and appearances, Remarks Topic(s): Bank notes, Coronavirus disease (COVID-19), Cryptocurrencies, Digital currencies and fintech, Payment clearing and settlement systems

• Distributional Effects of Payment Card Pricing and Merchant Cost Pass-through in Canada and the United States

  Staff Working Paper 2021-8 Marie-Hélène Felt, Fumiko Hayashi, Joanna Stavins, Angelika Welte

  Although credit cards are more expensive for merchants to accept than cash or debit cards, merchants typically pass through their costs evenly to all customers. Along with consumer card rewards and banking fees, this creates cross-subsidies between payment methods. Because higher-income individuals tend to use credit cards more than those with lower incomes, our results indicate that these cross-subsidies might lead to regressive distributional effects.

  Content Type(s): Staff research, Staff working papers Topic(s): Bank notes, Financial institutions, Financial services, Market structure and pricing, Payment clearing and settlement systems JEL Code(s): D, D1, D12, D2, D23, D3, D31, E, E4, E42, G, G2, G21, L, L8, L81

• Estimating Policy Functions in Payments Systems Using Reinforcement Learning

  Staff Working Paper 2021-7 Pablo S. Castro, Ajit Desai, Han Du, Rodney Garratt, Francisco Rivadeneyra

  We demonstrate the ability of reinforcement learning techniques to estimate the best-response functions of banks participating in high-value payments systems—a real-world strategic game of incomplete information.

  Content Type(s): Staff research, Staff working papers Topic(s): Digital currencies and fintech, Financial institutions, Financial system regulation and policies, Payment clearing and settlement systems JEL Code(s): A, A1, A12, C, C7, D, D8, D83, E, E4, E42, E5, E58

• Eggs in One Basket: Security and Convenience of Digital Currencies

  Staff Working Paper 2021-6 Charles M. Kahn, Francisco Rivadeneyra, Tsz-Nga Wong

  Digital currencies store balances in anonymous electronic addresses. This paper analyzes the trade-offs between the safety and convenience of aggregating balances in addresses, electronic wallets and banks.

  Content Type(s): Staff research, Staff working papers Topic(s): Central bank research, Digital currencies and fintech, Financial services, Payment clearing and settlement systems JEL Code(s): E, E4, E42, E5, E51, E58