Financial institutions in Canada analyze the practical application of digital currencies issued by the Central Bank

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Such currency would be called "central bank digital currency" (CBDC).

The research report was prepared by two senior researchers - Walter Engert, Senior Director, Research - Office of the Superintendent of Financial Institutions Canada, and Ben S. K. Fung, Director of Economic Research and Analysis in the Currency Department of the Bank of Canada. Their main role is to provide leadership in the department's economic research program.

Engert and Fug also advise the department on issues related to the development of retail payments and their implications for the demand for cash.

Based on the document, there are six possible advantages that a central bank can obtain by issuing a virtual currency. First of all, the authors focused on three advantages: payments for consumers, financial integration and financial stability. According to them, CBDCs would reduce friction for online payments and force small traders to provide services via the Internet. According to the report, the cryptocurrencies supported by the central bank can also reduce the cost of retail payments.

The authors argued that financial inclusion can greatly help the economies of developing countries, but will have a limited effect in developed countries such as Canada.

Regarding financial sustainability, the authors stated that CBDCs can offer consumers a safe way to store value without facing the risks that are currently faced by the financial systems of developed countries such as Canada.