19 : the impact of the pandemic on the demand for and use of cash, ” bank of canada staff discussion paper no. 2020 - 6 ( july 2020 ). cash : physical and digital let ’ s start with canadian bank notes. as we have all embraced technology and its many innovations, one thing that hasn ’ t changed as much is cash. it ’ s true that the bank has updated bank notes in new and exciting ways. we ’ ve incorporated state - of - the - art security features to combat counterfeiting. we now make bank notes using polymer instead of paper. and we ’ ve made a concerted effort to ensure the images and portrait subjects on bank notes reflect canada ’ s unique and changing identity. but the basic nature of bank notes has not changed — they are still physical objects. however, for the past decade or so, the bank has been considering these bank notes, and we ’ ve been asking ourselves : could canada and canadians benefit from a digital form of cash? in a speech in montreal a year ago, i gave our preliminary view : we did not see a need for a central bank digital currency at that time, but we could imagine scenarios that could make a central bank digital currency beneficial in canada. i concluded that we would move forward to develop such a digital currency as a contingency plan, given how quickly the world is changing and the time required to develop a viable product. 7 a year later, our view remains unchanged : a digital currency is by no means a foregone conclusion. that said, the world has been changing even faster than we expected. in fact, just two weeks after i spoke, the first lockdown was imposed, which accelerated the evolution of the digital economy. and so our work to prepare for the day when canada might want to launch a digital loonie — backed by the bank — has also accelerated. we are not alone. in a recent survey, almost 60 percent of central banks reported the possibility that they will issue a central bank digital currency within six years. this is up from less than 40 percent only a year ago. 8 one scenario we have been watching is whether a sharp decline in the acceptance of cash reaches a tipping point in canada. we ’ ve already seen that as societies and economies modernize, cash has been losing ground to digital methods of payment — around the world and here at home. 9 since covid - 19 hit, we ’ ve seen a growing hesitancy in canada

. at the same time, we shall make efforts to further improve financial eco - system in the west region and cultivate good market environment so as to retain and attract more financial resources and give the market a full play of its fundamental role in financial resource allocation. improving financial service in the west region shall be integrated into the overall reform strategy of the chinese financial system. in 2003, under the steering of the central government, reform of the stateowned commercial banks was officially launched, with important progress already made on various fronts. in particular, the industrial and commercial bank of china, the bank of china, china construction bank and the bank of communications have all completed financial restructuring and been transformed into join - stock companies. the bank of communications and china construction bank successfully went public. through the reform measures, financial situation of these banks evidently improved, internal control mechanisms were strengthened and corporate governance started to play its disciplinary roles. these banks each maintain a large branch network in the west region, and these branch offices, as i believe, will persistently improve their business management and adaptability to the market economy with the deepening of financial reform, and thus will provide better financial services to economic development of the west region. consistent with steady growth of the chinese economy, the policy banks also face the problem of business transformation. for a foreseeable long period of time, the policy banks are still needed to strengthen their support to economic development in the west region, however, due to limitations of these banks in efficient resource allocation and business development, these traditional policy banks face the challenges in the transformation of business mode. from the perspective of international experiences, we can see that starting in 1990s, policy banks in various countries embarked on the journey of business transformation. generally, these policy banks have transformed themselves into universal development financial institutions. successful examples include the korea development bank and the german development bank ( kfw ). in line with the inherent requirements of the market economy, policy banks in china shall be transformed into development financial institutions with financial viability and strong competitiveness which mainly engage in providing development financing for the medium and long - term projects while continuing to provide policy financial services subject to the fiscal situation of the state. in this case, the policy banks could serve financing needs of industrial restructuring, infrastructure construction and the implementation of “ overseas investment strategy ” by enterprises in the west region and the country at large in a more sustainable way. though limited in asset size and capital strength, local financial institutions also play an important