to use cash. although canadians are holding more cash than ever, cash may not currently be circulating as much. in recent bank of canada surveys, consumers report some t. lane, “ money and payments in the digital age ” ( speech to the cfa montreal fintech rdv 2020, montreal, quebec, february 25, 2020 ). c. boar, h. holden and a. wadsworth, “ impending arrival — a sequel to the survey on central bank digital currency, ” bank for international settlements working paper no. 107 ( january 2020 ). k. huynh, “ how canadians pay for things, ” bank of canada the economy, plain and simple ( october 2019 ). - 4merchant preference for contactless payments, and some report experiencing merchants ’ refusal of cash due to fears of virus transmission. 10 of course, it ’ s too early to tell whether these trends will continue beyond the pandemic, but we are watching closely. the other scenario i raised in my speech last year is the increasing use of digital currencies created by the private sector, including cryptocurrencies and so - called stablecoins. while these products have existed for several years, some could see a boost from the acceleration of digitalization in the midst of the pandemic. even in this increasingly digital economy, though, cryptocurrencies such as bitcoin do not have a plausible claim to become the money of the future. they are deeply flawed as methods of payment — except for illicit transactions like money laundering, where anonymity trumps all other features — because they rely on costly verification methods and their purchasing power is wildly unstable. the recent spike in their prices looks less like a trend and more like a speculative mania — an atmosphere in which one high - profile tweet is enough to trigger a sudden jump in price. in contrast, widespread adoption of stablecoins for everyday transactions is possible, although none is near that point yet. because in most cases they are partly or fully backed by safe assets, their purchasing power is designed to be more stable. but many issues need to be addressed before we can be confident that stablecoins can be used safely by the general public. the financial stability board is examining these issues at the global level, and i am chairing the international working group that is taking this work forward. here in canada, we still have work to do to ensure that our regulatory framework covers these new products. amid all

, insurance, and real estate – accounted for about 18. 5 per cent of real output in 2000 and just over 20 per cent in 2008, based on 2002 constant prices. j. allen, w. engert, and y. liu, " are canadian banks efficient? a canada - u. s. comparison, " financial system review ( ottawa : bank of canada, december 2006 ) : 61 - 65. available at : < http : / / www. bankofcanada. ca / en / fsr / 2006 / research _ 1206. pdf >. v. dolar and c. meh, " financial structure and economic growth : a non - technical survey " ( working paper no. 2002 - 24, bank of canada, 2002 ). available at : < http : / / www. bankofcanada. ca / en / res / wp / 2002 / wp0224. pdf >. the risks associated with financial innovation, in the context of an appropriate regulatory framework. i'd now like to draw some of these threads together by discussing what policy can do to help. the role of policy the combination of factors that are thought to explain canada's productivity problem suggests that efforts to tackle the productivity challenge must be broad based. appropriate labour market policies, tax structure, competition policy, and an open trading system can all help to boost productivity. let me say a few words about the bank of canada's roles in monetary policy and financial system policy. since 1991, canada's monetary policy has been guided by an explicit inflation target. while we have been successful in meeting the target – for the past 15 years, inflation has averaged almost exactly 2 per cent – it's important to remember why inflation control is so crucial. low, stable, and predictable inflation contributes to better economic performance. it enables clear price signals to be sent, which in turn helps people to make wise borrowing and investment decisions and thus makes the economy more resilient to economic shocks. the bank of canada also has important responsibilities in supporting a stable and efficient financial system, which is critical to long - run growth. the bank's work on financial stability is carried out in collaboration with federal and provincial regulators and other public sector partners, and as a member of international bodies. one important responsibility is financial system surveillance – identifying, monitoring, and reporting on risks to the financial system. the bank also oversees canada's clearing and settlement systems, providing liquidity, both