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The Bank of Canada published a report on the feedback it has received to date about a potential digital Canadian dollar. It confirmed that Canadians place a high value on central bank-backed cash and want to maintain access to bank notes. Also, Canadians value their right to privacy and many expressed concerns that a digital dollar could compromise that right. In addition, they don't want a digital dollar that will add to financial stability risks. The Bank reconfirmed that likelihood of a digital loonie being needed is still uncertain, and the ultimate decision whether to go ahead with one depends on the Parliament.

Payments Canada published a paper that explores global wholesale CBDC developments in different jurisdictions: Australia, Switzerland, United Arab Emirates and Saudi Arabia. This paper is the fourth installment in Payments Canada's CBDC educational series. That aims to provide an understanding of a potential CBDC issuance in Canada, along with an exploration of the potential economic and social implications

The Centre for International Governance Innovation (CIGI) published a conference report based on an April 2022 workshop attended by Canadian and international experts (including yours truly). The discussion focused on the international backdrop and what can be learned from global leaders in central bank digital currencies (CBDCs), to determine next steps for Canada and to assess the legal and regulatory changes required to support a Canadian CBDC.

The Canadian Securities Administrators (CSA) is strengthening its approach to oversight of crypto trading platforms by expanding existing requirements for platforms operating in Canada. Also, the CSA announced that it is of the view that stablecoins, or stablecoin arrangements, may constitute securities and/or derivatives. In that context, crypto trading platforms that are registered or that have entered into a pre-registration undertaking are prohibited from permitting Canadian clients to trade, or obtain exposure to, any crypto asset that is itself a security and/or a derivative. Crypto trading platforms are expected to have established policies and procedures to determine whether each crypto asset they provide exposure to is a security and/or derivative.

Bank of Canada Governor Tiff Macklem reportedly said that next year (2023) the central bank plans to consult the public on a potential central bank digital currency (CBDC). It is moving from the research phase into the development phase to be prepared if the need arises to issue a CBDC. However, the Governor made clear that a decision on whether to issue a CBDC is up to parliament. Macklem outlined three drivers that could result in the launch of a retail CBDC;  a loss of control over the Bank's monetary authority if there is a dramatic switch from cash usage into other digital currencies, or if Canadians heavily adopt a private sector stablecoin, particularly one not denominated in Canadian dollars.

"Last March, U.S.-based cryptocurrency exchange Coinbase expanded its footprint north of the border, hanging its shingle in Canada. The move, part of the largest U.S. crypto exhange's efforts to increase its international presence, could be a signal of its challenges and opportunities abroad."

Although the Bank of Canada has no plans for issuing a digital currency immediately, the Central Bank is not ruling out the possibility of launching one due to potential mass adoption of private digital currencies - and the possibility of cashless societies.

The Financial Transactions and Reports Analysis Center of Canada will soon implement enhanced AML/CFT regulations for businesses operating with cryptocurrencies. The laws including updated guidelines for virtual currencies.

Toronto-based 3iQ Corp in partnership with CoinShares launched of an Ethereum exchange-traded fund (ETF) on the Toronto Stock Exchange (TSX). It's the fourth Ethereum ETF to launch this week in Canada and the eighth crypto ETF now trading in the country. The US Securities and Exchange Commission (SEC), which has yet to approve a crypto ETF, currently has nine Bitcoin ETF applications to either approve or decline.

Scott Hendry: "It's been apparent for many years now that, with technology modernizing so many other aspects of our lives, the physical nature of currency should also evolve to meet the changing demands of businesses and consumers. Recognizing this, the Bank started looking at the digitization of money almost a decade ago to prepare for a day when the Government of Canada may take a decision to issue a CBDC."

Binance stopped its services to clients from Ontario, Canada, following the Ontario Securities Commission's (OSC) notice to Binance and multiple and crypto exchanges for their violation of the local securities laws. Meanwhile, the firm is facing regulatory troubles in multiple other jurisdictions, including a ban from operating in the United Kingdom imposed by the Financial Conduct Authority, and a warning by Japan's Financial Services Agency for operating in the country without being registered.

An internal Bank of Canada presentation, prepared for Governor Stephen Poloz and the bank's board of directors, offers the most detailed public insight yet into the bank's thinking on a proprietary digital coin.

While the US still struggles to bring regulatory clarity to the world of cryptocurrencies, its neighbor, Canada, currently faces taxation issues. The country was quick to introduce crypto taxes as early as in 2013. However, the country's CPAs are concerned that tax rules might scare away future entrepreneurs.

Each province in Canada has its own securities legislation, which has led to some differences in how a "security" is defined depending on the jurisdiction. However, securities legislation in every province includes "investment contracts" within their definition of a "security."

This study investigates whether contactless credit cards are an important contributor to the decline in cash transactions, based on Canadian panel data from 2010 to 2017. It shows that unobserved factors influence cash use, and these must be controlled for when estimating the impact of contactless credit cards on cash use. It also shows the different effects that contactless credit cards have on the choice to pay with cash (the extensive margin) and on how much cash is used (the intensive margin). The study finds that the use of contactless credit cards negatively influences how much cash is spent but not whether to pay in cash. Overall, the impact of contactless credit cards on the transactional demand for cash in Canada is small over the 2010-17 period, at about 3 percent. These results are in line with previous findings for Canada and elsewhere.

The Bank of Canada has posted an opening for a CBDC Project Manager, saying that is "embarking on a program to design a contingent system for a CBDC... It will take into consideration a wide variety of factors, including policy considerations, diverse stakeholder needs, difficult technical challenges and the development of a technical architecture to realize a CBDC pilot system.

Bank of Canada Deputy Governor Tim Lane said that CBDC should have limits on how much anonymity it gives users, there would need to be a trade-off in terms of privacy were a CBDC to act as a replacement or complement to cash. A central bank should not issue CBDC that would increase the scope for illicit transactions to take place. The Bank of Canada has been exploring different CBDC infrastructure models to find an optimal balance between regulation and privacy, but CBDC would not be able to offer the same cash-like degree of anonymity on an unlimited scale.

This Bank of Canada study examines how the pandemic has influenced the demand for and use of cash using data from its Bank Note Distribution System. These data show that the value of notes in circulation grew sharply in March and April. Part of the increase reflects precautionary steps taken by financial institutions to increase their cash inventories during the pandemic, given concerns about possible disruptions to cash transportation services, and to reduce the risk of cash stockouts from potential customer demand. The flow of cash deposits from retailers to financial institutions, which would typically help replenish institutions' note inventories, was disrupted during the pandemic. As a result, financial institutions compensated for this shortfall by drawing cash from the Bank of Canada.

"Building an anonymous central bank digital currency (CBDC) presents "particular" security risks - not only to the issuer but to the users themselves, according to the Bank of Canada (BoC)."

The Bank of Canada provided an update on the impact the COVID-19 pandemic on the demand for cash and the use of methods of payment based on data from the Bank Note Distribution System and from consumer surveys conducted in April and August 2021. Cash in circulation remained high throughout 2021, driven mainly by demand for large-denomination notes. Canadians' holdings of cash on hand in April (median $70) and August (median $80) were comparable to results seen in 2020. Other cash holdings reported by Canadians remained elevated, with a median value of $260 in August. In August 2021, 62% of Canadians used cash for payments, and indicators of merchant acceptance of cash improved in both the April and August surveys. A large majority of Canadians (around 80%) in 2021 continued reporting that they have no plans to go cashless in the next five years.