On May 24, 2022. Bank of Canada announced the exploration and research of issuing digital form of Canadian dollar; Canada has made a first step of going cashless.
“Bank of Canada, in an era of rapid digitalization, we need to do the necessary work to be ready if Canadians’ payment preferences or needs change. As commerce becomes ever more digital, Canadians should continue to have all the benefits of money issued by the central bank.”
We are witnessing a global change who is following the legislation of cashless society. As the percentage of cash, transaction slowly loses his strength and more and more transaction goes digital the process of going cashless is an easy step for Central bank of Canada.
As announced Central bank of Canada is approaching their goal to make a cashless society. It is uncertain that Canada will need a digital dollar but Canadians will decide in Parliament if a, Digital Dollar should be issued. A Digital Dollar would complement bank notes, not replace them says Canadian central bank.
About 90% of transaction now are, made in digital payment and more and more merchants start using digital form of payment refusing to use cash. If this trend continues, Canada will complete abandon cash in few years. Is it the choice of the consumer or do the current situation of merchants make the choice for consumer?
The more important is that retailers will Remove the entire infrastructure required to store and maintain cash and if they do, there is no going back. Now using cash is free of banking fees but still there is very solid demand for cash say Sharon Kozicki, the deputy governor of the Bank of Canada,
In “Bank of Canada Policy Lab”, key study published in July 2023 “What are the social policy implications for a ‘less-cash’ society and how it might impact different population groups?” is written.
“In 2021, cash represented only 10 percent of total payments volume and one percent of total transaction value. Higher-value transactions were primarily conducted using non-cash methods. From 2016 to 2021, the cash transaction volume had contracted by 62 percent, a decline accelerated by the pandemic. The same period witnessed a surge in the adoption of contactless and digital payments. Post-pandemic, many Canadians did not return to cash use on a day-to-day basis. However, cash in circulation, driven by heightened demand, is rising.”
Some countries have prohibited persons, businesses selling or offering for sale consumer goods or services at retail from refusing to accept cash as a form of payment like Norway, Ireland, and Spain also some cities in America have introduced similar laws
Canadian citizen need to understand what is going cashless mean and recognize the risk they will face in future.