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Cash and COVID-19: What happened in 2021

Author

Listed:
  • Heng Chen
  • Walter Engert
  • Kim Huynh
  • Daneal O’Habib
  • Joy Wu
  • Julia Zhu

Abstract

We provide 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. Our key findings are as follows: • 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.

Suggested Citation

  • Heng Chen & Walter Engert & Kim Huynh & Daneal O’Habib & Joy Wu & Julia Zhu, 2022. "Cash and COVID-19: What happened in 2021," Discussion Papers 2022-8, Bank of Canada.
    • Handle: RePEc:bca:bocadp:22-8
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    References listed on IDEAS

    as
    1. Heng Chen & Walter Engert & Marie-Hélène Felt & Kim P. Huynh & Gradon Nicholls & Daneal O'Habib & Julia Zhu, 2021. "Cash and COVID-19: The impact of the second wave in Canada," Discussion Papers 2021-12, Bank of Canada.
    2. Daniela Balutel & Christopher Henry & Jorge Vásquez & Marcel Voia, 2022. "Bitcoin adoption and beliefs in Canada," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 55(4), pages 1729-1761, November.
    3. Heng Chen & Walter Engert & Kim Huynh & Gradon Nicholls & Mitchell Nicholson & Julia Zhu, 2020. "Cash and COVID-19: The impact of the pandemic on demand for and use of cash," Discussion Papers 2020-6, Bank of Canada.
    4. Heng Chen & Walter Engert & Kim Huynh & Gradon Nicholls & Julia Zhu, 2021. "Cash and COVID-19: The Effects of Lifting Containment Measures on Cash Demand and Use," Discussion Papers 2021-3, Bank of Canada.
    5. Gerrit Bilkes, 1997. "The new bank note distribution system," Bank of Canada Review, Bank of Canada, vol. 1997(Summer), pages 41-54.
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    Citations

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    Cited by:

    1. Rösl, Gerhard & Seitz, Franz, 2022. "On the stabilizing role of cash for societies," IMFS Working Paper Series 167, Goethe University Frankfurt, Institute for Monetary and Financial Stability (IMFS).
    2. Walter Engert & Kim Huynh, 2022. "Cash, COVID-19 and the Prospects for a Canadian Digital Dollar," Discussion Papers 2022-17, Bank of Canada.
    3. Angelika Welte & Katrina Talavera & Liang Wang & Joy Wu, 2024. "Résultats de l’enquête de 2023 sur les modes de paiement acceptés par les commerçants : la pandémie de COVID 19 n’a pas fait disparaître l’argent comptant," Discussion Papers 2024-02fr, Bank of Canada.
    4. Angelika Welte & Joy Wu, 2023. "The 2021–22 Merchant Acceptance Survey Pilot Study," Discussion Papers 2023-1, Bank of Canada.
    5. Christopher Henry & Matthew Shimoda & Julia Zhu, 2022. "2021 Methods-of-Payment Survey Report," Discussion Papers 2022-23, Bank of Canada.

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    More about this item

    Keywords

    Bank notes; Central bank research; Coronavirus disease (COVID-19); Digital currencies and fintech; Econometric and statistical methods;
    All these keywords.

    JEL classification:

    • C - Mathematical and Quantitative Methods
    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • E - Macroeconomics and Monetary Economics
    • E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates
    • O - Economic Development, Innovation, Technological Change, and Growth
    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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