Canada is among the first nations to approve a Bitcoin ETF, and in terms of hash rate, it is the fourth-largest country.
Deputy Governor of Bank of Canada, Paul Beaudry, says cryptocurrencies such as Bitcoin don’t pose any serious risk to the economy. Beaudry discussed the possible risks to the stability of the Canadian economy during the Ontario Securities Commission Dialogue 2021 on Nov. 23.
When asked if cryptocurrencies pose a risk, Beaudry said that the Bank of Canada doesn’t believe that crypto is “developing in a way that creates a systemic type of risk for a financial system” up till now. The deputy governor noted that it is because cryptocurrencies are “quite removed from a financial system.”
However, as the crypto market continues to grow bigger and having more people invest in it, crypto becomes more of a risk. This could mean some level of vulnerability. Beaudry stated:
“We’re not at the point yet of thinking this a big risk for the economy but this is something we’re keeping an eye on very closely.”
Furthermore, Beaudry stressed that top cryptocurrencies like Bitcoin don’t play too much role in payments. This is because investors buy Bitcoin “mainly to speculate.” However, there are digital assets like stablecoins, which are backed by fiat currencies and assets, and could play a larger role in terms of payments. Beaudry added:
“That’s something we’re also keeping an eye on.”
Canada has become one of the most crypto-friendly nations in the world. It has become one of the first nations in the world to approve a Bitcoin exchange-traded fund. Also, the country has been a popular spot for crypto miners. As of August 2021, Cambridge Bitcoin Electricity Consumption Index ranks it the 4th largest nation in terms of hash rate.
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Wilson is a successful crypto analyst and content writer with many years of writing experience in finance and blockchain fields. His interests are in crypto-asset research and technical analysis, Fintech, Blockchain, DeFi, NFTs, and Personal Finance.