use of physical cash is reduced or eliminated altogether. the second is where private cryptocurrencies make serious inroads. if either scenario came to pass, society may be well - served with a digital currency : that is designed, issued and distributed by an organization that is guided by the interest of the public good, rather than profit ; that is safe, resilient, universally accessible and private — just like cash ; and that is backed by a central bank ’ s balance sheet and its reputation for preserving the value of our money. our intent would not be to issue a cbdc to replace bank notes or chartered bank deposits. the public still wants both of these products, and we will support them. in fact, we are actively planning for the design of a new $ 5 bank note. the bank is in the midst of a wide consultation process to ask canadians who they want as the portrait subject of this new bank note. and as the world changes, the bank will continue to fulfill its mandate to support secure, reliable and efficient payment options that benefit all canadians. thank you for your time and attention this afternoon, and i look forward to your questions. i would like to thank scott hendry and darcey mcvanel for their help in preparing this speech. 1 c. henry, k. huynh and a. welte, “ 2017 methods - of - payments survey report, ” bank of canada staff discussion paper no. 2018 – 17 ( december 2018 ). 2 t. lane, “ decrypting ‘ crypto ’ ” ( remarks to the haskayne school of business, university of calgary, calgary, alberta, october 1, 2018 ). 3 for more information on in this initiative, phase 4 of project jasper, visit the bank of canada website. 4 financial stability board, “ monitoring of fintech. ” 5 official monetary and financial institutions forum ( omfif ), digital currencies — a question of trust. an omfif report on global public confidence in monetary, financial and payment institutions, 2020. 7 / 8 bis central bankers'speeches 6 c. boar, h. holden and a. wadsworth, “ impending arrival — a sequel to the survey on central bank digital currency, ” bank for international settlements ( bis ) papers no. 107 ( january 2020 ). 8 / 8 bis central bankers'speeches

to understand our views on the economy and its prospects. but it is equally important that we get out across the country and listen to people. these two - way conversations help fill in the gaps that economic statistics leave behind. we organize this effort around our business outlook survey, which is based on conversations between our regional representatives and business leaders. members of governing council also engage in these conversations. i am here in british columbia not just to give a speech — i am also here to meet with business leaders and with students. 3 / 6 bis central bankers'speeches understanding and financial markets given the subject matter, getting people more interested in the bank ’ s work may be a challenge. but there is no shortage of interest in what we do and say from financial market participants. financial market participants trade securities based on their understanding of the economic outlook and the bank ’ s monetary policy. the bank controls only one interest rate — the overnight rate — so its policy actions are transmitted to the economy through financial markets. this means that market expectations for monetary policy and the economy are embedded in market prices and interest rates. as a result, fluctuations in financial markets provide very useful signals about the future — they summarize the views of a multitude of market participants. in recent years, many central banks have tried to enhance their impact on financial markets and the economy by giving explicit direction about future policy, or what we call forward guidance. since this is a speech about transparency, let me be absolutely clear what i mean by that. central banks make forward - looking statements all the time because monetary policy takes time to affect inflation. i could say something like : “ the economy is running close to capacity, so higher interest rates will be needed to keep inflation on target. ” that does not meet the textbook definition of forward guidance. forward guidance is more specific than this. it usually ties future interest rates to an explicit condition, such as a specific time frame or an economic statistic. the most definitive form of forward guidance in canada ’ s experience came in 2009, during the global financial crisis. we cut our policy rate effectively to zero, but we believed that the economy required more stimulus than that. so, we committed to keep the policy rate at the lower bound for an extended period, provided that the outlook for inflation remained unchanged. because this anchored expectations for the overnight rate for some time, it caused longer - term interest rates to decline, too. this stimulated the economy even more. today we think of this kind of forward