Publications, Staff research, Digital currencies and fintech
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Predicting the Demand for Central Bank Digital Currency: A Structural Analysis with Survey Data
How much of a CBDC would Canadian households want to hold, and what design features of a CBDC would they care about? -
Central Bank Digital Currency and Banking: Macroeconomic Benefits of a Cash-Like Design
Should a CBDC be more like cash or bank deposits? An interest-bearing, cash-like CBDC not only makes payments more efficient but also increases total demand. This has positive effects on other transactions, inducing more deposit taking and lending and, thus, bank intermediation. -
Revisiting the Monetary Sovereignty Rationale for CBDCs
One argument for central bank digital currencies (CBDCs) is that without them, private and foreign digital monies could displace domestic currencies, threatening the central bank’s monetary policy and lender of last resort capabilities. I revisit this monetary sovereignty rationale and offer a wider view—one that considers a broader set of currency functions and captures important cross-country variation. -
Bitcoin Adoption and Beliefs in Canada
Using an economic model as well as survey data from the Bank of Canada, we study what factors influence the adoption of Bitcoin in Canada. -
Cash and COVID-19: The impact of the second wave in Canada
The COVID-19 pandemic significantly increased the demand for cash. Cash in circulation increased sharply from March through December 2020, particularly in the early months of this period. Although use of electronic methods of payment also increased significantly, cash use for payments remains high for low-value transactions and among certain demographic groups. -
The Positive Case for a CBDC
We discuss the competition and innovation arguments for issuing a central bank digital currency (CBDC). A CBDC could be an effective competition policy tool for payments. A CBDC could also support the vibrancy of the digital economy. It could help solve market failures and foster competition and innovation in new digital payments markets. -
Consumer Cash Withdrawal Behaviour: Branch Networks and Online Financial Innovation
The physical network of bank branches is important in how consumers manage their cash holdings. This paper estimates how consumer withdrawal behaviour responds to the distance they must travel to their branch. -
An Exploration of First Nations Reserves and Access to Cash
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. -
Payments on Digital Platforms: Resiliency, Interoperability and Welfare
This paper studies the business model choice between running a cash platform and a token platform, as well as its welfare and policy implications.