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Crypto regulation efforts need to keep pace with market growth -Bank of Canada official -Breaking


© Reuters. FILE PHOTO – Representations for the Ripple and Bitcoin virtual currencies can be seen on a computer motherboard in this illustration photo, February 14, 2018. REUTERS/Dado Ruvic/Illustration

By Julie Gordon

OTTAWA (Reuters] – Canadians are increasingly investing in cryptoassets and regulations must be developed to address this trend, a Bank of Canada official explained. This was after noting that not everyone may understand the potential risks of buying products such as bitcoin.

As cryptoassets are integrated into Canada’s financial system, the issue becomes more urgent. This increases the chance that crypto shocks such as the recent price fall could impact the wider financial system.

This is an emerging area which is small but growing quickly. It is largely unregulated,” Bank of Canada’s Senior Deputy Governor Carolyn Rogers told Reuters on Thursday. We don’t want it to get larger before we put in regulatory controls.

According to a Bank of Canada report, this week’s global cryptocurrencyasset market value soared from $200billion in the early 2020s to $2 trillion by the peak. Canadians now own more bitcoin than ever before, up from 5% in 2020.

Rogers stated that people can see the potential for rapid gains, just like any asset that is prone to price fluctuations. They may not fully understand the risks. This is our concern. You may be unaware that this is not an area that’s regulated.

As investors lose confidence in high-risk assets, the cryptocurrency market plunged, leading to some significant losses for investors.

Rogers stated that the industry must be regulated. However, it is difficult to figure out how.

She said that these are somewhat similar to banking assets and somewhat like capital market. It is difficult to determine how they would fit into the existing regime. If they do not fit, then how can we adapt the system so they do.