Key Takeaways:
- The Canadian government cited its worries about the potential threats that digital assets and the digitization of money may pose to its financial system.
- The government’s plans for cryptocurrencies were described in a brief section of the statement titled “Addressing the Digitalization of Money.”
On the potential threats that digital assets and currencies may portray to the nation’s established monetary sector, the Canadian government will start a consultation process.
The North American country, which consists of 10 provinces and 3 territories, stated in its announcement of the 2022 budget that digital assets will play a significant part in the dodging of sanctions while also enabling illicit activity.
In addition to its annual budget, the government’s “2022 Fall Economic Statement,” which was presented on Nov. 3 by Deputy Prime Minister Chrystia Freeland, serves as a financial update.
The document stated that cryptocurrency is going to transform financial institutions both in Canada and abroad, and that Canada’s financial regulatory regimes must remain competitive.
A task to democratic systems worldwide is the digitization of money. Digital assets and cryptocurrencies have been used in recent months to evade international sanctions and finance nefarious practices, both in Canada and abroad, according to a section of the document titled effective government.
Beginning this week, the current regime will hold meetings with those engaged in cryptocurrencies, stablecoins, and central bank digital currencies.
Earlier this year, Canadian truckers protesting against imposed COVID-19 mandates, known as The Freedom Convoy 2021, were famously put down by Prime Minister Justin Trudeau owing to Bitcoin.
The government’s purpose in launching a finance industry regulatory review centered on the digital revolution of money and preserving financial sector security and stability was part of the 2022 budget, which was published on April 7. The consultations that have been announced are believed to be a part of that intention.
Capital markets in Canada and around the world are changing as a consequence of the emergence of cryptocurrencies and the digitalization of money. Our financial system’s regulation in Canada needs to keep up with the times.
The digitalization of money also puts democratic institutions all over the world in danger. Digital assets and cryptocurrencies have been used to circumvent international sanctions and finance criminal dealings in Canada and other countries over the past few months.
Budget 2022 stated the government’s intention to begin a legislative evaluation of the financial sector with a focus on the digital revolution of funds and establishing financial sector reliability and safety to assist with addressing these issues in Canada.
In June, the Senior Deputy Governor of the Bank of Canada, Carolyn Rogers, stated that the number of Canadians who own cryptocurrency assets is rising quickly. According to the senior official, investors in products like Bitcoin frequently are unaware of the inherent risk involved. In such a culture, initiatives to regulate and maintain the industry must start to keep up.
