Public consultations by the Bank of Canada into the potential creation of a digital Canadian currency revealed stark opposition against the proposal.
Findings released on Wednesday indicate that 86% of respondents provided a negative response to the idea of a digital Canadian dollar. Only 5% of respondents indicated a positive response, with less than 1% agreeing that Canada needs its own digital currency.
At the forefront of Canadians’ rejection are concerns about privacy.
A significant portion of respondents championed the anonymity offered by cash, expressing deep mistrust in the Bank of Canada’s (BOC) ability to safeguard a digital currency.
Respondents to the questionnaire could leave anonymous comments at the end of the consultation.
“I am deeply concerned about privacy and freedom… I cannot imagine a CBDC [Central Bank Digital Currency] being compatible with our values of liberty and privacy,” said one respondent.
“The fear of many Canadians is to use it as an instrument of control like the Chinese social credit model. We don’t want it,” wrote another respondent in French.
Despite these concerns, the Bank has proposed a digital dollar model that wouldn’t require identification, a bank account, or to disclose private information to perform basic financial transactions, similar to bank notes and some prepaid cards, they claim. The BOC said that this system would allow Canadians to voluntarily provide some form of identification to help retrieve lost or stolen funds.
“I have trouble understanding how such a system would work without network or Internet connectivity, and how anonymity could be guaranteed without the risk of money laundering,” wrote one respondent in French.
Some respondents did not believe that this currency would remain anonymous.
“Digital dollars will be tracked by all banks, all federal agencies and the [government]. They will be programmed to control what people buy, how much accessed at a single time, carbon footprint, political party affiliations, religion, and every other possible aspect of your personal life,” wrote a respondent.
The global shift towards cashless transactions has prompted central banks worldwide to consider digital versions of their currencies. A central bank-backed digital currency would differ significantly from volatile cryptocurrencies by maintaining a stable value akin to the existing Canadian currency.
However, trust is a big concern for Canadians.
“Think of how quickly this has the potential to go wrong with the wrong people in power,” wrote one respondent.
One answer from a respondent even compared this potential system to the control already exercised with Canada’s current financial system — one with the potential for far less control.
“A digital dollar sounded great until we saw the Federal government freeze private bank accounts of its own citizens for supporting a political movement it disagreed with. I have no faith at all in the system anymore,” wrote the respondent.
In 2020, the BOC announced its contingency plan to develop a digital currency if ever needed. While these consultations were meant to assess public interest, the ultimate decision to implement a digital dollar lies with Parliament.
Carolyn Rogers, the Bank of Canada’s senior deputy governor, emphasized the Bank’s commitment to ensuring the Canadian payments system is equipped for the future.
“If Canadians decide a digital dollar is necessary, our obligation is to be ready,” she said.
Based on this report on what the Bank of Canada has heard to date, Canadians do not feel it’s necessary.
Conservative Leader Pierre Poilievre has been a vocal critic of a centralized digital currency initiative. Last year, Poilievre pushed for a ban on the Bank of Canada from creating such a currency while simultaneously promoting decentralized cryptocurrencies as a hedge against inflation. However, his stance on the latter has seen a recent shift.
In addition to public opinion, the Bank sought insights from various stakeholders, including the financial sector and civil society groups.
Financial institutions have expressed a need for more clarity on the operational framework of a digital dollar to understand its impact on their business models. Financial institutions were concerned that a digital dollar could replace bank deposits, reducing one of their sources of funding.
Civil society groups, particularly those representing Canadians with disabilities, consumers, and low-income individuals, have shown support for a digital currency if its design removes existing barriers to accessibility and financial inclusion.
“Canadians do not need a digital dollar, there is already one in place. It is your debit card,” wrote a respondent.
“It’s the beginning of the end of freedom,” said another.