An analysis of the financial transaction behaviors among Canadians, both within the existing payment landscape and a hypothetical cashless framework, reveals intriguing insights. Furthermore, the potential of a central bank digital currency (CBDC) to alleviate unmet payment requirements within a cashless society is deliberated upon. While a substantial portion of adult Canadians enjoys unhindered access to a diverse array of payment avenues, questions arise about the potential challenges certain demographics might confront within a cashless paradigm, should cash cease to be widely accepted.
In order for a CBDC geared towards facilitating transactions to effectively tackle unmet payment necessities, its widespread embrace by the primary consumer clusters—those already well-versed in various payment modalities—becomes imperative. This critical mass adoption is a prerequisite for incentivizing broad merchant acceptance of the CBDC, thereby propelling heightened consumer engagement and usage. Nevertheless, it should be acknowledged that a significant number of consumers encounter minimal obstacles or inconveniences in their payment routines, and thus, may possess relatively modest motivations to enthusiastically adopt and, more crucially, extensively employ the CBDC. Such circumstances, if they come to pass, could potentially impede the broad acceptance sought from merchants.
This deliberation hints at the complexities entailed in using a CBDC to address the payment lacunae experienced by a segment of consumers, particularly when considered within the contours of this study. As elucidated, the subset of consumers grappling with unresolved payment necessities might only truly reap CBDC benefits if its usage delivers substantial advantages to the majority, thereby compelling its widespread utilization. In essence, the viability of ameliorating the payment challenges faced by a minority through CBDC issuance is intricately linked to the overarching material benefits experienced by the majority, which, in turn, would steer its adoption.
