Crypto Regulation Needs to Keep up with Market Growth says Bank of Canada

Key Takeaways

  • The number of Canadians who already own crypto assets is continually growing, says  a senior Bank of Canada executive, and attempts to manage the realm must keep up. 
  • According to the executive, Many people may be unaware of the dangers of investing in digital currencies like bitcoin.
  • Carolyn Rogers contends that crypto assets are similar to banking assets and capital markets, and  one of the obstacles is figuring out how they integrate into the pet senr regime, and if they don’t, how we can change the framework to accommodate them.

Carolyn Rogers, the Bank of Canada’s Senior Deputy Governor, revealed on Thursday that the number of Canadians who own crypto assets is increasing rapidly. Often people, according to the senior official, are unaware of the underlying risk of investing in products like Bitcoin, and in such a culture, attempts to regulate and manage the industry must begin to keep up.

The value of the global cryptoasset market increased from $200 billion in early 2020 to $3 trillion at its peak, according to a report released this week by the Bank of Canada. From 5% in 2020 to 13% in 2021, the number of Canadians who own bitcoin has more than doubled.

“This (digital assets) is still a small area, but it’s growing really quickly,” Rogers said in a recent interview with Reuters. Furthermore, it is widely unregulated.

She went on to say that people envision cryptocurrency as a way to make quick bucks without realising the market’s fluctuation or ungoverned existence. To back up her claim, she cited the latest market crash, which soured investors’ appetite for high-risk assets and resulted in significant financial losses for many investors around the world.

“People see an opportunity for quick gains in any asset that is fluctuating in price. Our concern is that they may not be aware of the dangers. They might not even realise it’s not a regulated zone.”

“While this is still a small area, it is rapidly expanding.” It’s also largely unregulated… We don’t want to wait until it’s much bigger before implementing regulatory controls.”

From 5% in 2020 to 13% in 2021, the number of Canadians who own Bitcoin has more than doubled. Rogers, commenting on the grey side of the same, said,

“People see an opportunity for quick gains in any asset that is fluctuating in price. Our concern is that they may not be aware of the dangers. They might not even realise it’s not a regulated zone.”

Bitcoin deployment has been on the upsurge in general, across the world. Indeed, with the prevailing accrual pattern in game, historical milestones have recently been successfully accomplished.

Roger appears to believe that the industry should be regulated; however, the challenge is determining the best way to do so. She had this to say about it:

“These resemble banking assets and capital markets in some ways. One of the difficulties is determining how they fit into the present administration, and if they don’t, how we can change the system to accommodate them.”

From a report by Bank of Canada labelled ‘Bitcoin Awareness, Ownership, and Use: 2016-20,’ released in April 2022 by ‘The Globe and Mail,’ Early in 2020, the value of the global crypto-asset market soared from $200 billion to $3 trillion in a matter of months. Furthermore, the percentage of Canadians who own bitcoin has increased from 5% in 2020 to 13% in 2021.

Default image
Aadrika Sharma

I enjoy writing and try to learn new things every passing day!

Can’t find what you’re looking for? Type below and hit enter!