The Bank of Canada has spent years studying whether a central bank digital currency (CBDC) could improve payments in the country. Its research found that most Canadians already have many ways to pay, which limits the need for a digital Canadian dollar.
In an August 2023 Staff Discussion Paper, the Bank looked at whether a CBDC could help people with unmet payment needs. It noted that most Canadians already use cash, bank accounts, debit cards, credit cards, and online payment services.
That means a new payment method would have to offer something useful enough to make consumers and shops change their habits. The Bank said this could make widespread CBDC use hard to achieve.
The issue is not only whether people would download a digital wallet. Shops would also need to accept the digital dollar. Without enough users and merchants, a new payment system would have little value. The Bank also noted that some Canadians could still benefit from a CBDC. But the needs of this smaller group would not by themselves create the level of use needed for a payment-focused CBDC.
Canada already has a strong payment system
The Bank’s later research gave a clearer picture of the problem. In December 2024, it published a study on CBDC use at physical stores. More than 80% of retail purchases in Canada took place at physical locations, making merchant acceptance an important part of any new payment system.
The study found that a CBDC could gain users in some cases, but adoption costs could make a large difference. In a model with no adoption costs, a simulated CBDC could gain meaningful consumer and merchant use. When even a small monthly cost was added, adoption fell sharply.
This helps explain the Bank’s concern in the original 2023 paper. A CBDC would not automatically create a new payment market. It would have to compete with payment tools that Canadians already know how to use.
Canada has also changed how it oversees payment firms. Registration under the Retail Payment Activities Act began in November 2024, while rules on risk management and safeguarding customer funds came into force in September 2025.
At the same time, crypto firms have faced tighter rules. Several exchanges reduced or ended services for Canadian users, including dYdX in April 2023 and Bybit and Binance in May 2023.
In April 2023, dYdX announced that it would gradually stop serving Canadian users. Bybit and Binance also followed with similar announcements.
The Canadian Securities Administrators also issued guidance for crypto asset funds and investment products, covering areas such as custody, investor protection, investment decisions, and staking.
Unfortunately, today we are announcing that Binance will be joining other prominent crypto businesses in proactively withdrawing from the Canadian marketplace.
We would like to thank those regulators who worked with us collaboratively to address the needs of Canadian users. Albeit a small market, it held sentimental value for us as the home country of our founder. We had high hopes for the rest of the Canadian blockchain industry. Unfortunately, new guidance related to stablecoins and investor limits provided to crypto exchanges makes the Canada market no longer tenable for Binance at this time. We put off this decision as long as we could to explore other reasonable avenues to protect our Canadian users, but it has become apparent that there are none.
Our remaining Canadian users are receiving an email with comprehensive information on how this will impact their accounts going forward. While we do not agree with the new guidance, we hope to continue to engage with Canadian regulators aimed at a thoughtful, comprehensive regulatory framework. We are confident that we will someday return to the market when Canadian users once again have the freedom to access a broader suite of digital assets.
— Binance (@binance) May 12, 2023
Also Read: South Korea’s CBDC Pilot Faces Scrutiny Over Lack of Independent Security Audit
Canada has scaled down its retail CBDC work
The Bank’s position has changed since the original article. It now says its main research on a retail CBDC is complete and that it is scaling down its retail CBDC work. The Bank is shifting its attention to payment systems, oversight, and policy work.
That does not mean the Bank has stopped studying digital money. In June 2025, it published research on a possible retail CBDC design and found that some designs could support fast and low-cost payments, while issues such as system resilience and integration still needed more work.
The Bank also continues to study CBDC risks. A June 2026 paper tested how a possible retail CBDC could affect Canadian banks during a severe recession. The study found that a CBDC could be introduced without breaking financial stability if it used safeguards such as holding limits and a gradual rollout.
Canada has also moved into wholesale digital money research. In May 2026, the Bank joined the BIS Project Agorá to test tokenized money for cross-border payments.
So the Bank’s current approach is more cautious than a plan to launch a retail digital dollar. Canada is still studying digital money and tokenization, but its main focus has shifted toward improving the payment system that already exists.
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