Canada to Launch a Consultation on Cryptocurrencies, CBDCs, and Stablecoins

  • Bitcoin ownership in Canada was at 13% in 2021, a huge increase from 5% in 2018-2020.
  • The Bank of Canada claims it’s been studying Bitcoin since 2016 and has seen an increased interest among the locals.
  • The planned consultation will examine the risks of cryptocurrencies and CBDCs to the financial system in Canada.

Authorities in Canada are concerned about the rise of cryptocurrencies and how digital assets are changing the Canadian economy. So, the country’s Deputy Prime Minister, Chrystia Freeland, announced that the government is set to launch a consultation on the risks that stablecoins, cryptocurrencies, and CBDCs will pose to its traditional financial system.

The Deputy Prime Minister released the government’s “2022 Fall Economic Statement, ” a mini-budget, on Thursday. It included provisions on taxes, budget projections, and a section tagged “digitalization of money,” which focused on the global impact of cryptocurrencies. Speaking on the widespread development of cryptocurrencies, the government official noted that “Canada’s framework for the regulation of our financial system needs to keep pace.”

A section of the document titled “effective government” read,

The digitalization of money poses a challenge to democratic institutions around the world. In the last several months, digital assets and cryptocurrencies have been used to avoid global sanctions and fund illegal activities, both in Canada and around the world.

The planned consultation on cryptocurrencies and digital assets is supposedly part of the Canadian government’s plans to launch a “financial sector legislative review focused on the digitalization of money and maintaining financial sector stability and security,”  which featured in the 2022 budget. The consultations will also evaluate the importance of a CBDC and associated risks.

Canadians have developed a unique interest in cryptocurrencies and digital assets. The Bank of Canada revealed last month that 13% of Canadians owned Bitcoin as of 2021. This figure greatly improved from the 5% recorded in 2018-2020.

The bank noted that the increase followed “widespread increases in the savings and wealth of Canadians during the pandemic.” Some local fintechs in the country already provide cryptocurrency services alongside regular products. These platforms have provided greater access to cryptocurrencies and awareness in general.

The Bank of Canada said it has been studying Bitcoin since 2016 and used polls to understand how Canadians thought about cryptocurrencies as an asset class. Surprisingly, statistics show that more Canadians who hold Bitcoin don’t even know what it is, despite the growth in Bitcoin ownership in the country.

Lawrence Woriji Verified

Lawrence has covered some exciting stories in his career as a journalist, he finds blockchain-related stories very intriguing. He believes Web3 will change the world and wants everyone to be a part of it.

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