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Bank of Canada Staff Paper: Bitcoin Adoption and Beliefs in Canada

Bank of Canada | Daniela Balutel, Christopher Henry, Jorge Vásquez, Marcel Voia | | Nov 30, 2021

Bitcoin adoption and beliefs in Canada Bank of CAnada - Bank of Canada Staff Paper:  Bitcoin Adoption and Beliefs in CanadaIn the last few years, the number of so-called cryptocurrencies—a form of electronic money that allows people to make direct person-to-person transactions—has surged, with more than 740 now available. Among them, Bitcoin enjoys the highest trading value and volume as well as significant mainstream media attention.

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Gaining insights into why more people are adopting cryptocurrencies is increasingly important. That’s because these currencies, if widely adopted, could affect both the banking sector and central bank’s core functions, such as monetary policy. We provide an analysis to better understand how three factors influence people’s decisions about Bitcoin adoption:

  • network effects—as more people adopt and use Bitcoin, it becomes a more useful platform
  • individual learning—whether beliefs about the future of Bitcoin influence a person’s present-day decision to use the currency
  • social learning—how beliefs about Bitcoin are formed by those around us

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We find that both network effects and individual learning are important and increase the probability of adopting Bitcoin. In other words, a person will more likely own Bitcoin if they:

  • belong to a larger network of Bitcoin users
  • have more optimistic beliefs about Bitcoin’s future

We also find that peers’ beliefs are not currently a key factor behind Bitcoin adoption. This makes sense because Bitcoin adoption in Canada remains low (around 5 percent).

Download the 41 page PDF Paper --> here


NCFA Jan 2018 resize - Bank of Canada Staff Paper:  Bitcoin Adoption and Beliefs in Canada The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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