Share this article
Central Bank Crypto Could Bring Economic Gains: Bank of Canada Paper
Central bank-issued cryptocurrency could bring economic welfare gains for Canada and the U.S., according to a researcher from Canada's central bank.
By Wolfie Zhao
Updated Sep 13, 2021, 8:13 a.m. Published Jul 27, 2018, 9:30 a.m.
Central bank-issued cryptocurrency can potentially bring economic welfare gains for Canada and the U.S., according to a central bank researcher.
In a working paper published Thursday, the Bank of Canada's S. Mohammad R. Davoodalhosseini states that introducing a central bank digital currency (CBDC) "can lead to an increase of up to 0.64 percent in consumption for Canada and up to 1.6 percent for the US, compared with their respective economies if only cash is used."
STORY CONTINUES BELOW
Don't miss another story.Subscribe to the Crypto Daybook Americas Newsletter today. See all newsletters
At the moment, Davoodalhosseini says, a key question to the "many" central banks currently mulling the option of issuing a CBDC is whether cash and a digital form of fiat currency should co-exist, and if so, how to maintain an "optimal" monetary policy.
Based on detailed modeling and mathematical calculations, the researcher argues in the paper that a country's economic welfare – at least for Canada and the U.S. – might be better off by substituting cash with a CBDC, provided implementation is not extremely costly.
He wrote:
"Having both cash and CBDC available to agents (consumers) sometimes results in lower welfare than in cases where only cash or only CBDC is available. This fact suggests that removing cash from circulation may be a welfare-enhancing policy if the motivation to introduce CBDC is to improve monetary policy effectiveness."
The paper further states that, by introducing a CBDC, central banks could have a higher level of flexibility in adjusting current monetary policy.
"This is because the central bank can monitor agents' portfolios of CBDC and can cross-subsidize between different types of agents, but these actions are not possible if agents use cash," it says.
The paper's quantitative approach follows a previous December 2017 effort by other researchers from Canada's central bank to gauge the value of offering a CBDC over cash – work that took a more qualitative look at the pros and cons.
CoinDesk reported at the time that the researchers argued that the potential benefits of a CBDC may vary between developed and developing economies.
Bank of Canada image via Shutterstock
Більше для вас
Що варто знати:
- As of October 2025, GoPlus has generated $4.7M in total revenue across its product lines. The GoPlus App is the primary revenue driver, contributing $2.5M (approx. 53%), followed by the SafeToken Protocol at $1.7M.
- GoPlus Intelligence's Token Security API averaged 717 million monthly calls year-to-date in 2025 , with a peak of nearly 1 billion calls in February 2025. Total blockchain-level requests, including transaction simulations, averaged an additional 350 million per month.
- Since its January 2025 launch , the $GPS token has registered over $5B in total spot volume and $10B in derivatives volume in 2025. Monthly spot volume peaked in March 2025 at over $1.1B , while derivatives volume peaked the same month at over $4B.
Більше для вас
Bitcoin Faces Japan Rate Hike: Debunking The Yen Carry Trade Unwind Alarms, Real Risk Elsewhere
Speculators maintain net bullish positions in the yen, limiting scope for sudden JPY strength and mass carry unwind.
Що варто знати:
- Impending BOJ rate hike largely priced in; Japanese bond yields near multi-decade highs.
- Speculators maintain net bullish positions in the yen, limiting scope for sudden yen strength.
- BOJ tightening may contribute to sustained upward pressure on global yields, impacting risk sentiment.
Top Stories
