. despite these arguments, almost all countries in the world have so far maintained the above - mentioned two - tiered system. this fact seems to prove that the advantages of the two - tiered system are still greater than its disadvantages. iii. it innovation and digitization of payment instruments digitized payment instruments under the two - tiered system, private entities, including banks, have developed a range of innovative payment instruments, incorporating the available technologies of the time. for example, credit cards and debit cards allow their users to make and settle payments by submitting instructions to transfer deposits held in banks. card users therefore do not have to carry around large amounts of cash. another example is electronic money. people can charge a certain amount in mediums of electronic money such as ic cards, and thereby avoid making small cash payments every day. electronic money has particularly developed in japan. furthermore, digitized payment instruments based on the liabilities of non - banks have developed along with the popularization of e - commerce. a typical example is paypal developed in the united states. the global expansion of cashless payments today with rapid it innovation, cashless payments, especially mobile payments, are growing on a global scale. i would like to point out two big changes behind this. first, the number of people using mobile phones or smartphones has sky - rocketed recently. since the birth of the iphone in 2007, smartphones have rapidly spread across the globe in just a decade. according to an estimate by the world bank group, around two - thirds of the 1. 7 billion unbanked adults in the world have access to mobile phones or smartphones. this change has promoted the rapid growth of mobile payments, especially in emerging and developing economies. in some countries such as china, the share of mobile payments is greater than that of traditional means of retail settlements. a mobile payment does not require bricks and mortar branches or atms to provide financial services. instead it uses digital information technology to reach out to emerging and developing economies and provide financial services globally through leapfrogging physical infrastructure. as such, digital technologies are also gathering much attention as a great instrument to promote " financial inclusion. " the other change is the global " data revolution. " indeed " fintech " can be understood as a financial aspect of the on - going data revolution. people around the world are creating a gigantic amount of data every second by using smartphones for sns posting, browsing websites and issuing location data through

stephen s poloz : opening statement before the house of commons standing committee on finance opening statement by mr stephen s poloz, governor of the bank of canada, before the house of commons standing committee on finance, ottawa, ontario, 24 october 2016. * * * good afternoon, mr. chairman and committee members. senior deputy governor wilkins and i are happy to be before you today. it is our normal practice to appear before this committee twice a year to discuss the bank ’ s monetary policy report ( mpr ). we published our latest mpr last week and are happy to answer questions about it and other economic topics. however, i suspect you may also want to ask about the agreement with the federal government that was announced this morning, which renews our inflation - control framework for another five years. so, before we respond to questions, allow me to say just a few words on both topics, beginning with the mpr. since our last appearance, there have been two developments that led us to downgrade our outlook for the canadian economy. the first is a lower trajectory for exports. after a sharp decline in goods exports over five months, we had a rebound in july and august. but that was not enough to make up for the ground that had been lost. we worked hard to determine the reasons for this shortfall. about half of it can be explained by weak global trade and composition changes in us demand, but the rest is unclear. so, in our outlook, we now assume that longer - term structural issues, such as lost export capacity and competitiveness challenges, are responsible for the remainder. this assumption led us to reduce the projected level of gdp by the end of 2018 by about 0. 6 per cent, compared with our july projection. the second major factor behind our downgraded growth outlook is the federal government ’ s macroprudential measures to promote housing market stability. these measures are welcome because they will, over time, ease vulnerabilities related to housing and household imbalances. that is important because such vulnerabilities can magnify the impact of negative economic shocks. we expect the government ’ s measures will restrain residential investment by curbing resale activity in the near term and lead to a modest change in the composition of construction toward smaller units. we estimate that this will leave the level of gdp 0. 3 per cent lower at the end of 2018 than projected in july. given these developments, we cut our growth estimate for 2016 to