Cryptocurrency Adoption on the Rise in Canada, According to New Banking Report

According to a report published by the Bank of Canada, the number of bitcoin holders doubled from 5% in 2020 to 13% in 2021.

As the cryptocurrency market experiences one of its worst downturns, there is a silver lining, especially if you live in Canada. In a report published five days ago, the Bank of Canada revealed that the number of bitcoin holders almost tripled between 2020 and 2021, from 5% to 13%.

On average, the amount of bitcoin held was $500, with most holders using BTC for speculation due to high levels of volatility that prevented its use as a form of payment.

“Prices for crypto assets like Bitcoin and Ether were generally four to five times more volatile throughout 2021 than the S&P 500 stock index.”

However, the bank noted that fiat-pegged stablecoins backed by liquid reserves could offer some relief from the volatility of other cryptocurrencies if issuers can meet swap requests.

Crypto Ties to Traditional Markets Are Growing, Report Says

Cryptocurrencies have become more closely intertwined with traditional finance, through derivative instruments or as collateral for loans, increasing the potential for crypto market shockwaves impacting the broader economic environment. Therefore, the report states that governments must coordinate regulatory efforts to prevent criminals from exploiting loopholes. The Bank of Canada has an officer in charge of the Financial Stability Board’s Stablecoin Regulatory Issues Working Group responsible for coordinating regulatory efforts around stablecoins.

Canada’s approach to digital regulation has existed at the provincial level. However, the federal government announced a legislative overhaul of the financial sector in its 2022 budget, with digital currencies a top priority.

In March, US President Joe Biden signed an executive order, tasking various government agencies with investigating cryptocurrencies and coordinating efforts to draft comprehensive regulations to, among other things, protect investors and prevent the illegal use of cryptocurrencies for money laundering and terrorist financing.

Canadian pension fund invested $150 million in Celsius

Celsius Network, whose current CFO Rod Bolger previously served as CFO of the Royal Bank of Canada, Canada’s largest bank by market capitalization, yesterday halted withdrawals to put the company “in a better position” to meet with ransom requests “over time”. ” sparking fears of another TerraUSD scenario. The TerraUSD stablecoin crashed last month as it was unable to hold its peg to the US dollar following multiple withdrawal requests.

Ignoring warnings from US state regulators about Celsius’s interest-bearing products, the financial professionals who run the $326.7 billion pension fund for the Canadian province of Quebec invested in Celsius with WestCap Group, a venture capital firm, pumping $400 million into the lender’s pockets. The official position of the Caisse de Depot et Placement du Quebec (CDPQ), the company that managed the pension fund at the time, was that its $150 million contribution was a bet on the disruptive potential of blockchain.

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