Bank of Canada Official Calls for Faster Crypto Regulation -Breaking
- According to the executive at the issuing bank, he is concerned about the slow pace of regulation efforts in order to keep up with crypto asset-related businesses.
- Additionally, the financial crisis caused by digital currencies eventually reached the whole of Canada’s financial system.
- She believes digital assets must be immediately regulated, but it’s still difficult to determine the right way.
Canada’s Bank of Canada was concerned about rapid adoption of bitcoin and other digital currencies in Canada, and slow regulatory efforts.
According to the senior deputy governor of the issuing bank, Carolyn Rogers (NYSE:) “this is an area that is still small but it’s growing really rapidly. Reuters said that the area is largely unregulated.
Elle said that Canadian monetary authorities don’t want to wait for the circulation and trade of digital assets to increase before putting in regulatory controls.
Additionally, the issuer worries that not all Canadians fully know about the potential risks of investing in crypto currencies like Bitcoin. This is why regulatory efforts should be in line with digital currency growth.
The official stated that the issue increases with the integration of cryptocurrencies into the Canadian financial system. She believes this increases the risks for the country’s financial system in particular when digital assets are involved in crucial situations like the one currently.
The Bank of Canada released this week a report stating that global digital currency markets have grown from $200 billion to $3 trillion in the early 2020s to $300 billion last year.
- From 5% to 13%, the Canadians that have BTC savings increased by a whopping 23% in just one year (2021-2021).
- KPMG Canada conducted two recent surveys to gauge consumer interest in investing in cryptocurrency funds and buying them.
The Investment Executive website received statements about the findings from Kareem Said, a blockchain expert and partner at the legal and auditing firm.
“Retail investor interest in crypto assets started with early adopters years ago, and since then, we’ve seen a steady wave of institutional interest in the space – from pension funds and insurers to hedge funds and family offices.”
Sadek noted that nearly a third (33%) of those surveyed had been exposed to this asset class.
“They may not even understand that it is not a regulated area”
The executive of the Bank of Canada explains that “Like any asset that’s jumping around in price, people see an opportunity for quick gains.” And noted that the bank’s concern is the possibility that Canadians are not understanding the risks of cryptocurrencies. “They may not even understand that it’s not a regulated area.”
Following the increase in interest rates at the US Federal Reserve, other central banks worldwide and the ending of financial stimulus policy the market appetite for high-risk assets decreased.
This caused the recent crypto winter that left many investors and DeFi companies on the brink of ruin and led to the collapse of projects like – Luna.
Carolyn Rogers feels that the regulation of crypto is an urgent necessity. But, there’s still not enough clarity and agreement on how it will happen.
They are some thing like bank assets but also capital markets. “One of the problems is to find out where they fit within the existing regime. And if they don’t, how do you adjust the regime so that it fits them,” said the executive.