Bank Of Canada: CBDC Can Assist With Financial Inclusion As Cash Usage Declines

The Bank of Canada believes a Central Bank Digital Currency (CBDC) can play a transformative role in enhancing financial inclusion. 

One of the standout revelations from the report, titled "Redefining Financial Inclusion for a Digital Age: Implications for a Central Bank Digital Currency," is the decline in cash usage in Canada. There is also marked preference for cards and digital payments. 

In a timely alignment with the report's findings, Benzinga is set to host its Future of Digital Assets conference on Nov. 14. Industry leaders, including representatives from the Bank of Canada, will gather to discuss the evolving landscape of digital currencies and their potential impact on global economies. The conference promises to provide a platform for in-depth discussions on the CBDC's role in financial inclusion, further emphasizing the importance of the Bank of Canada's recent revelations.

Traditional metrics, such as access to bank accounts or the internet, have often been the yardstick for measuring financial inclusion.

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However, the paper argues that these metrics might not capture the intricate challenges individuals face, especially in the realm of trust and financial literacy.

Discrimination faced by certain communities, notably Indigenous and Black Canadians, in financial institutions can deter them from accessing traditional financial services.

Digital inclusion, ensuring equitable and safe access to digital technologies, is highlighted as a pivotal factor.

While urban areas in Canada enjoy robust digital connectivity, the report emphasizes the significant challenges faced by remote regions, especially Indigenous communities.

The potential introduction of a CBDC, with provisions for offline digital payment solutions, can be a game-changer for these areas.

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