Crypto circle with low financial literacy? Canadian study: Individuals with low financial knowledge tend to hold higher proportions of cryptocurrency.

The Bank of Canada released a new report on August 31st, based on a survey that showed a higher percentage of people with low financial literacy levels hold cryptocurrencies, while only 4% of those with higher financial knowledge own cryptocurrencies.

Cryptocurrency Financial Zero Knowledge?

The study was conducted between August and September last year, with the following comparison of financial knowledge among the surveyed Canadian public:

• High knowledge level: 47%
• Medium level: 35%
• Low level: 18%

According to their sampling results, it's somewhat ironic for cryptocurrency investors, Bitcoin enthusiasts, or the crypto community that among Canadians with lower financial knowledge, the proportion of those holding cryptocurrency is 8%, which is twice that of the high knowledge level (4%).

The focus of the report's research was on the public's use of cash, adoption of digital payments, and the public's gradually diminishing view of cash in the payment field. As per current trends, cash usage has been declining since 2009, with credit cards alone accounting for 40% of transactions in 2017.

Bitcoin Still Has Some Popularity in Canada

In reality, the status of Bitcoin is still quite vague and far from being widespread. People with higher financial knowledge may be more familiar with traditional financial products, so it's reasonable that they haven't invested in cryptocurrency. Of course, it may simply be a sampling error in the survey.

Interestingly, Canadian banks have been conducting surveys on cryptocurrency in recent years. In a survey in December 2017, when Bitcoin was at a historical high, the motives for Canadian people to invest in Bitcoin were as follows:

• Speculation: 58%
• Bought because of friends: 12%
• Curiosity about this new technology: 7%
• Actual use for online payments: 6%

In addition, the percentage of Canadians familiar with Bitcoin has increased from 64% in 2016 to 85% in 2017. The Bitcoin holding rate has also increased from 2.9% to 5%, while 1.6% of the population holds other altcoins such as Ethereum and Litecoin.

Following this sampling survey, the Bank of Canada also set two necessary conditions for the development of Central Bank Digital Currency (CBDC) in the future. One is that the use of cash in Canada has already dropped to a certain level, and the other is that privately issued digital currencies have been successful in the Canadian economy. If either condition is met, Canadian authorities will formulate appropriate policies to benefit Canadians from adopting CBDC.

The report emphasizes that despite the overall decline in the use of cash in daily transactions, some people still rely heavily on cash. Therefore, the cash holding and usage of the public, as well as the actual application of digital currencies, will continue to be observed.

Although there is no immediate urgency to switch to CBDC in Canada or even in various countries worldwide, with China's DCEP seeming to be nearing completion, countries are feeling some pressure and making arrangements. It was previously reported that although there has been no major progress, Canada has released a job opening for a "Central Bank Digital Currency Project Manager" (CBDC).