In order to start the consultation, the government of Canada cited its worries about the potential threats that digital assets and the digitization of money may pose to its financial system.
According to its new mini-budget, the federal government of Canada will soon begin a consultation on cryptocurrencies, stablecoins, and Central Bank Digital Currencies (CBDCs).
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 government’s plans for cryptocurrencies were described in a brief portion of the announcement titled “Addressing the Digitalization of Money.”
The country’s financial system regulation “needs to keep pace” with the way cryptocurrencies and money digitization are “transforming financial systems in Canada and around the world,” according to the report.
According to the statement, the digitization of money “poses a risk to democratic institutions around the world,” underlining the use of cryptocurrencies for both domestic and international sanctions evasion and the financing of illegal activity.
The government stated that stakeholder consultations on digital currencies, stablecoins, and CBDCs would begin on November 3, however it is yet unclear which stakeholders will be included.
The government’s intention to launch a “financial sector legislative review focused on the digitalization of money and maintaining financial sector stability and security,” which was a part of the 2022 budget released on April 7, is understood to be the context for the consultations that have been announced.
In light of these dangers, this evaluation will also look at the “possible necessity” for a Canadian CBDC.
The COVID-19 vaccine mandate and limits in Canada sparked demonstrations in January, with participants turning to cryptocurrency fundraising platforms after being barred from rival fiat fundraising platforms.
On February 11, the government of the province of Ontario proclaimed a state of emergency as a result of protestor road blockades, forcing it to halt millions of dollars in donations intended for the protesters. At the time, the protesters had amassed about 21 Bitcoin, worth $902,000.
Invoking the Emergencies Act on February 14 gave Prime Minister Justin Trudeau the authority to freeze protesters’ bank accounts and keep an eye on “large and suspicious transactions,” including cryptocurrency.
Two days later, the federal police of Canada demanded in writing to a number of cryptocurrency exchanges that they cease processing transactions involving more than 30 unique crypto wallet addresses connected to the current protests.
