According to a survey by the Bank of Canada, the North American country remains faithful to cash payments, showing reluctance in the adoption of crypto.
Canadians prefer to use cash and cards in their daily lives, although the use of electronic payments is on the rise.
To incentivize the creation of a broad cryptographic economy, it is first necessary to create the conditions to promote technological innovation.
On this point, however, Canada still presents several limitations.
Let’s see everything in detail below.
Cash and cards drive the payments sector in Canada
According to an annual survey by the Bank of Canada, the adoption of crypto in the country is not going as hoped by the supporters of digital assets.
In the vast North American country it is evident how citizens are still anchored to traditional payments in cash and bank cards, with difficulty embracing alternatives.
Less than 3% of Canadians have revealed that they use Bitcoin and other crypto for daily transactions in two consecutive years.
On the contrary in 2023, 80% of citizens carried with them any amount of cash, demonstrating an attachment to physical payments.
In particular, from 2022 to 2023, it emerged that the population increased the average of “cash on hand” by 10 dollars, that is, the physical banknotes held daily in their pockets.
Since 2009, the year in which Bank of Canada started this kind of surveys, the average has increased from 72 Canadian dollars to the current 140.
The following chart shows the growth of this trend, with a focus on the “inflation adjusted” value.
Bank cards remain the most adopted payment method by Canadians. In 2023, 98% of people had at least one debit card, while 89% held a credit card. This factor is evident given the difficulty in accessing cash in the country with few ABMs (automated banking machines) available.
Since 2009 these values have increased significantly, although observing stagnation from 2017 onwards.
Recently it seems as if Canada has been looking for payment alternatives, while still remaining strongly anchored to traditions.
In the last 10 years, various alternatives have emerged, most of which are related to electronic transactions, with the crypto front, however, recording low values.
Payment options with email addresses and phone numbers are emerging loudly, while the adoption of crypto remains stuck at 2.5%.
Canada: the adoption of crypto continues very slowly, cash still preferred
As mentioned, the adoption of crypto continues but at a very slow pace.
In 2022, the use of cryptocurrencies represented 2.2% of the alternatives to cash and cards, while in 2023 it has only reached 2.5%.
Despite the growth of the sector and the maturity it is gradually achieving, in Canada it is still difficult to step out of one’s comfort zone.
According to the study by Bank of Canada, the main reason for the slowness of this technological transition is the widespread reluctance to remain without cash.
In fact, over 80% of the respondents reported “not having plans to stop using cash in the future”.
Although aware of the erosion of savings due to inflation and the costs associated with withdrawals and banking transactions, Canadians do not intend to change their habits.
In 2023 only 13.3% of respondents defined themselves as “cashless”, that is, without physical cash to spend.
Beyond this trend, which could nevertheless reverse at any moment, it should be noted that Canada is actually a “crypto-advanced” country.
Not by chance, the first Bitcoin ATM installed in the world in 2013, was placed right in Vancouver. To date, the country has as many as 2,941 ATMs for depositing and withdrawing Bitcoin, which is 7.7% of all active devices in the world.
For this reason, Canada boasts the second largest network of crypto ATMs globally after the United States.
Did you know that the world's first cryptocurrency ATM was installed in Vancouver, Canada, in 2013? 
It allowed users to buy and sell #Bitcoin for cash. Now, there are thousands of #crypto ATMs worldwide
#CryptoTwitter #web3 pic.twitter.com/tO7b4n10i6
— Eterna Hybrid Exchange (@Eterna_Hybrid) July 19, 2023
Bank Of Canada wants to promote technological innovation of crypto
The study by Bank of Canada does not intend to support the traditionalist attitude of the majority of the North American population, but rather to break the fear of change.
Not by chance the institute has recently inaugurated a new hub for technological innovation in Canada, also pushing for the adoption of crypto.
In collaboration with the Bank for International Settlements (BIS), the “IS Toronto Innovation Centre” has been launched in the hope of promoting innovation in the region.
The hub will be central for connections between Canada, Latin America and the Caribbean and will focus on topics such as open finance and alternative financial markets.
Tiff Macklem, governor of the Bank of Canada had stated the following in the mid-June announcement:
“While the financial sector continues to evolve, we must innovate in different areas and apply skills that are not traditionally associated with central banks. In this way, Canadians can share the benefits of innovation.”
The push for the adoption of crypto must, however, contend with the stringent regulations of the country, which stifle this kind of industry.
In a recent post, the CEO of Helius made specific reference to a Canadian regulation that would hinder the growth of the crypto sector.
As reported, Canadian citizens cannot purchase cryptocurrencies for a value exceeding 30,000 dollars per year. It is clear that in this way no major investor will ever be able to approach the business of crypto payments.
you've heard me talk about how insane it is that Canada doesn't let you buy over 30K worth of crypto per year
what's more insane is that, other than BTC & ETH, the ONLY other two cryptos exempt from this are
LITECOIN AND BITCOIN CASH pic.twitter.com/4mqyTR4grH
— mert | helius | hSOL (@0xMert_) April 29, 2024