Cash still king, says top bank
Canadians are passionate about their plastic money but still love the feel of cold, hard cash, according to a report from the Bank of Canada.
More than a decade after speculating that Canada was becoming a “cashless society,” the central bank says demand for banknotes continues to grow in this country. And that’s got the bank mulling changes to its currency strategy, including how it keeps pace with tech-savvy counterfeiters.
“Although electronic payment methods are gaining in popularity, the volume of bank notes in circulation continues to grow in line with the economy,” said the report, released yesterday as part of the fall issue of the Bank of Canada Review.
“This indicates that banknotes are still a significant means of payment and store of value in the Canadian economy, and that the positive attributes of cash, namely, convenience, the protection of privacy, broad acceptance, and public confidence, continue to be valued.”
That stands in sharp contrast to the stance it took in the mid-1990s, a period of “budgetary restraint” that had the central bank looking to save a little green of its own free credit report.com. Citing relatively low counterfeiting levels and the growing use of debit cards, the report said policy makers believed that cash usage would wane.
“Some financial observers were even musing about the possibility of a cashless society,” the report said. “The bank reasoned that if Canada was moving in that direction, perhaps it should be cautious about investing in costly research and development for bank notes.”
The central bank now says it ought to base its currency strategy on the assumption that old-fashioned paper money will continue to play a role in the payment system for the “foreseeable future.” That could see it step up the frequency with which it circulates new bills, the report said.