Canadians not overly eager to see central bank digital currencies

As the Bank of Canada and other central banks consider the role of central bank digital currencies, Canadians remain skeptical, according to new data from the CFA Institute.

“Acceptance by end-users will be critical for any central bank digital currency,” said Olivier Fines, head of EMEA advocacy with the CFA Institute, in a statement.

“Although central banks have solicited public comment on various consultation documents, much remains unknown about the public’s understanding of, interest in, and demand for CBDCs.”

The Liberal government’s fiscal update last fall said it was launching consultations on digital currencies, including CBDCs. Canada’s fiscal framework needs to keep pace with the rise of the currencies and how the digitization of money is “transforming financial systems in Canada and around the world,” the document said.

In a separate process, the Bank of Canada has studied the potential for a central bank digital currency. It has said it doesn’t anticipate the need for it right now but wants to be prepared if that changes in the future.

Regarding whether central banks should launch digital versions of fiat currencies, the CFA Institute found no clear consensus on a global level. The survey revealed that 42% of respondents were in favour, 34% were opposed and 24% had no opinion.

However, the survey highlighted regional variations in attitudes.

Developed markets, including North America, showed less enthusiasm for CBDCs (37%) compared to emerging markets (61%). The divergence was attributed to varying levels of economic development and capital market sophistication between the regions.

Emerging markets, with potential limited access to a wide range of banking and investment options, viewed digital versions of fiat currencies more favourably.

Among Canadian respondents, the survey revealed a notably low level of support for launching CBDCs, with only 38% in favour. The findings indicate a relatively conservative stance among Canadian investors regarding the adoption of CBDCs.

Among those in favour of CBDCs, the top reason cited globally was the enhancement of payment and money transfer infrastructure (58%). On the other hand, those opposing CBDCs at a global level most commonly cited data privacy concerns (50%) and a lack of actual use cases for CBDCs (40%).

The survey also explored whether investors would use a CBDC if offered by a central bank. Globally, 48% of respondents expressed their willingness to use a CBDC in some capacity, while in Canada only 34% said they would.

The results indicate that there is no clear consensus on the need for CBDCs, the report said, and central banks and governments will need to engage in significant educational efforts to explain the purpose and potential benefits of launching these digital currencies.

“There is much more work to do before the successful adoption of CBDCs,” the CFA Institute said in a press release.

The survey revealed that globally, 87% of respondents admitted to having little or moderate knowledge about CBDCs. This lack of understanding was consistent across regions.

Notably, younger respondents around the world were more likely to report a low level of understanding, with 51% of those under the age of 30 expressing limited knowledge compared to 39% among respondents aged 55 and older.