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Digital assets and the digitalization of money raise concerns about potential risks to Canada’s financial system, according to the Canadian government.
According to a new mini-budget released by the government, cryptocurrencies, stablecoins, and CBDCs will be the subject of a consultation.
Deputy Prime Minister Chrystia Freeland announced the government’s “2022 Fall Economic Statement” on November 3, serving as an update to its main budget.
“Addressing the Digitalization of Money” was a small statement section explaining the government’s cryptocurrency plans.
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Cryptocurrencies are transforming various financial systems and the digitization of money in Canada and worldwide, and Canada’s regulatory framework must keep pace.”
Cryptography’s use in sanctions avoidance and illicit activity financing domestically and internationally is highlighted in the statement as a threat to democratic institutions worldwide.
On November 3, the government plans to launch consultations with stakeholders on digital currencies, stablecoins, and CBDCs. However, which stakeholders will be included in the consultations has yet to be discovered.
During the 2022 budget released on April 7, the government announced the intention to launch a “financial sector legislative review focusing on the digitization of money and maintaining financial stability and security,” which is why the consultations are being announced.
According to this review, a Canadian CBDC may also be needed due to these risks.
As a result of getting booted off competing fiat fundraising platforms in January, protesters used crypto fundraising platforms to raise money for the COVID-19 vaccine mandate and restrictions in Canada.
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After protesters blocked roads in Ontario on Feb. 11, the province declared an emergency. Millions of donations to protesters were frozen as a result. At the time, protesters raised approximately 21 Bitcoins worth $902 000.
During Canada’s first emergency act in history, Justin Trudeau decided to freeze protesters’ bank accounts and monitor “large and suspicious transactions,” including cryptocurrency transfers.
Several crypto exchanges received letters from the Canadian federal police asking them to stop processing transactions for more than 30 specific crypto wallet addresses related to the protests within two days.
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