Canadian Crypto Adoption Struggling as Cash Remains King

For two years in a row, Canadians have shown a strong preference for cash and card payments for day-to-day purchases, with less than 3% using Bitcoin or other cryptocurrencies for daily transactions.

A yearly survey by the Bank of Canada revealed that Canadians consistently favor cash and bank cards for payments in 2022 and 2023. Despite this, alternative payment methods have generally increased over the past decade.

Of the various alternatives to cash and cards, most Canadian respondents preferred e-transfer, which uses email addresses or phone numbers for money transfers. However, cryptocurrencies remain the least favored payment method in Canada. In 2022, 2.2% of respondents used cryptocurrencies for payments, slightly increasing to 2.5% in 2023.

The primary reason for the slow adoption of cryptocurrency in Canada is a widespread reluctance to go cashless. Over 80% of respondents indicated that they have no “plans to stop using cash in the future,” a consistent trend since 2019.

Despite the stagnation in crypto adoption, the Bitcoin ATM ecosystem continues to thrive in Canada, which hosts the second-largest network of crypto ATMs globally, after the United States. Canada is home to 2,941 active Bitcoin ATMs, representing 7.7% of the world's total.

On the other hand, the Bank of Canada is making strides toward financial innovation. The central bank recently inaugurated a new innovation hub in collaboration with the Bank of International Settlements (BIS), named BIS Toronto Innovation Centre. This hub will focus on open finance, next-generation financial market infrastructures, and central bank digital currencies (CBDCs).

Bank of Canada Governor Tiff Macklem highlighted the importance of this partnership in fostering innovation in the region. He stated, “As the financial sector continues to evolve, we need to innovate in different areas and apply skills that aren’t traditionally associated with central banking. By doing so, Canadians can share in the benefits of innovation.”

Despite the slow adoption of cryptocurrencies for everyday transactions, Canada's efforts toward financial innovation signal a potential shift in the future.