The Canadian government announced on Thursday that it has now begun consultations with stakeholders on digital assets – including cryptocurrencies, stablecoins, and central bank digital currencies (CBDCs).
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Canadian Government Begins Crypto Consultations with Digital Asset Stakeholders
Kitco | Ernest Hoffman | Nov 4, 2022
The Canadian government announced on Thursday that it has now begun consultations with stakeholders on digital assets – including cryptocurrencies, stablecoins, and central bank digital currencies (CBDCs).
- The announcement was part of the Federal government’s fall economic update, which functions as a mid-year mini-budget for the Canadian economy six months after the release of the full annual budget each spring.
- The update acknowledged that cryptocurrencies and the digitalization of money “are transforming financial systems in Canada and around the world,” and that the country’s regulatory framework needs to keep up with the changes.
- It characterized the digitalization of money as “a challenge to democratic institutions around the world,” citing the use of cryptocurrencies and other digital assets “to avoid global sanctions and fund illegal activities, both in Canada and around the world.”
See: BoC: Bitcoin Ownership in Canada Jumped to 13% in 2021
- The BoC has also been studying CBDCs since the mid-2010s, releasing a CBDC assessment framework in 2016, and just last month publishing an analysis of archetypes for a potential retail CBDC.
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Cryptopolitan | Brian Koome | Nov 4, 2022
Addressing the digitization of money in Canada
- Bank of Canada Bitcoin Ownership Report: There has been an upsurge of blockchain and decentralized finance products like cryptocurrencies, Central Bank Digital Currency, and stablecoins. The report refers to the upsurge as the digitization of money and therefore bringing the need for a new framework of regulation and financial systems.
- The report acknowledged the global use of cryptocurrencies and digital assets to avoid international sanctions and use in funding illegal activity. The use in effect posed a significant challenge to democratic institutions.
To help address these challenges in Canada, Budget 2022 announced the government’s intention to launch a financial sector legislative review focused on the digitalization of money and maintaining financial sector stability and security. - 2022 Fall Economic Statement
See: NCFA Response to FINTRAC’s ‘Knee Jerk’ Regulations Requiring Donation Crowdfunding Platforms to Register and Comply with AML/ATF Legislation
- Impact of Emergencies Act: In January the Canadian government fell into headwinds with protestors (who were being funded in crypto) regarding the Covid 19 vaccine mandate and restrictions. The protests escalated, prompting the province of Ontario to declare a state of emergency. The ripple effect resulted in the Canadian Prime Minister Justin Trudeau invoking the Emergencies Act giving him powers to freeze ‘Freedom Convoy protesters’ bank accounts and monitor suspicious transactions including crypto. Millions of donations were frozen including a stash of 21 Bitcoin from fundraising platforms like GoFundMe and GiveSendGo.
- A day later the Canadian federal police sent letters to several crypto exchanges demanding they “cease facilitating any transactions” with more than 30 specific cryptocurrency wallet addresses linked to the ongoing truck protests in the country.
- The HonkHonk Hodl group raised 22 BTC valued at $1M through the Tallycoin BTC fundraising platform. The group later closed their group when they exceeded their fundraising goal.
- GoFundMe cooperated with Canadian enforcement officials to refund donors. Still, GiveSendGo has experienced a data leak exposing the identity of “thousands of names of those who donated to the Freedom Convoy,” as reported by The Daily Dot writer Mikael Thalen.
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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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