Canadian government launches consultations on cryptocurrencies, stablecoins and CBDCs.

The governing body stressed that such assets should operate under strict supervision as they facilitate illegal operations and pose a challenge to democratic institutions.

Priorities for cryptocurrencies in Canada include:

As revealed in its 2022 mini-budget, the Canadian federal government aims to impose regulations on the domestic crypto sector.

Officials have launched a series of consultations with shareholders to discuss the pros and cons of digital assets, stablecoins and central bank digital currencies.

Canadian officials argue that this is an important step because the digitization of money has transformed the global financial system.

They believe that cryptocurrencies can fuel criminal businesses and be used by violators to bypass penalties.

A statement from Canadian officials indicated the following:

Over the past several months, digital assets and cryptocurrencies have been used in Canada and other countries around the world to circumvent global sanctions and fund illegal activities.

To help address these challenges in Canada, Budget 2022 announced the government’s intention to initiate a legislative review of the financial sector to digitize funds and maintain the stability and security of the financial sector.

Several politicians and financial experts have warned that Russia could use digital currencies to circumvent some of the sanctions imposed by the West after Putin launched his own military operation in Ukraine.

On the contrary, the CEO of the world’s largest cryptocurrency exchange believes that Bitcoin and altcoins are not a suitable option to avoid financial penalties.

He emphasized that the asset class is highly traceable due to the underlying blockchain technology and governments around the world can easily trace such transactions.

Position of the Central Bank of Canada:

The North American country’s central bank urged the government to apply regulations to industry.

First Deputy Governor Carolyn Rogers said in June that the move should be completed as soon as possible because the property class is thriving and attracting more investors.

From their point of view, some individuals do not realize that when they enter the crypto market they can lose their entire investment.

It also warned:

It is still a small area, but it is growing very fast.

We don’t want to wait until it gets much bigger before we put in provisions.

According to Bank of Canada estimates, about 13% of adults in the country are Bitcoin HODLers (by the end of 2021), but 90% of the population is aware of Bitcoin’s existence.

A Bank of Canada study determined that bitcoin is most attractive to those with little financial knowledge.

Investors who have sufficient knowledge about the economy are the second largest demographic group to have an underlying cryptocurrency.

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