The move comes despite public consultations that found a large majority of Canadians (85 percent) say they would not use a central bank digital currency.
The Bank of Canada has taken its first steps toward trademarking a “digital Canadian dollar,” records show. The move comes despite the central bank saying last year that its future actions on a digital dollar would be decided by voters.
The BoC, in December 2023 filings under the
Trademarks Act, claimed ownership of any “digital dollar” launched within the country.
“Whether and when a digital dollar will become needed is uncertain,” the bank said in a Nov. 29
statement. “Ultimately, the decision to go ahead with a digital dollar belongs to Canadians, through their representatives in Parliament.”
The claims
were filed by BoC lawyers under
section 9 of the act, which permits any “public authority” to claim exclusive ongoing rights to everyday phrases “as an official mark for goods or services.” All other applicants must serve public notice to challenge the claim.
The bank has been
studying digital currency for more than a decade, and in 2014 it ordered the Royal Canadian Mint to disband a Bitcoin alternative called
MintChip. It was
sold to Toronto-based financial startup nanoPay in 2016.
Grahame Johnson, who was chief of funds management and banking the BoC at the time, told the Senate banking committee that the central bank “has several reasons to be interested in e-money developments.”
Among those reasons, one was that the bank earns investment revenue from the proceeds of issuing banknotes, which is used to pay its expenses, with the remaining amount remitted to the federal government. In 2013 the revenue was roughly $1.6 billion and the remittance was about $1 billion.
“The bank also has an interest in promoting safety and efficiency in the payment system,” Mr. Johnson said.
“We couldn’t issue another currency,” he said at an
April 2014 hearing. “In terms of digital currency, it is not under the current legal framework.”
The BoC, in a report last August, maintained that government-issued digital currency was not necessary.
“Acceptance and use of CBDC [central bank digital currency] could be challenging because most Canadians have access to several methods of payment using commercial bank money, provided by sophisticated incumbents,” the August 2023
report read. “Overcoming such barriers could require significant and sustained investment by the central bank.”
Canadians Reject Digital Dollar: Survey
A November 2023 BoC
report based on public consultations with 89,423 Canadians said a large majority (85 percent) would not use a digital Canadian dollar, while 12 percent said they would “potentially” use it and 3 percent said “don’t know.”
When asked if there were any circumstances in which they would prefer using a digital Canadian dollar instead of their current payment methods, 92 percent said no. The report also said 79 percent of respondents want regulations put in place to require merchants to accept cash payments. And 82 percent of respondents said they strongly disagreed that the bank should be researching and building the capability to issue a digital Canadian dollar.
The central bank describes a digital Canadian dollar as a digital form of cash that can be used to purchase items just like one would with paper money, but it would be an electronic transaction.
The BoC has promised a digital dollar would not replace paper money, but the report found that Canadians place a high value on holding cash that is backed by the BoC and “want to maintain access to bank notes,” said the Nov. 29, 2023,
media advisory accompanying the report.
Privacy was also a big concern for Canadians, the media advisory added, noting that “many expressed concerns that a digital dollar could compromise that right.”
It also noted that Canadians said a digital dollar should be easily accessible and should not add to financial stability risks.
