- The Canadian government will investigate crypto, stablecoins, and Central Bank Digital Currency (CBDC), as per the recent budget.
- There is a section in the budget devoted to “Addressing the Digitalization of Money,” which shows the government’s plans for cryptocurrencies.
- According to the government, money digitalization poses a threat to democracy across the globe due to the use of cryptocurrencies to avoid sanctions.
- It is likely that the government considered regulations after some people used digital assets earlier in order to avoid sanctions.
The Canadian federal government is attempting to address the crypto sphere within its borders. As stated in its mini budget on Nov. 3, it will commence findings on crypto, stablecoins, and Central Bank Digital Currency (CBDC).
The mini budget, titled the “2022 Fall Economic Statement” was released by the Deputy Prime Minister, Chrystia Freeland. It aims to support the government’s budget for the year and features a section focusing on “Addressing the Digitalization of Money,” which portrays the plans of the Canadian government for cryptocurrency.
“The rise in cryptocurrencies and the digitalization of money are transforming financial systems in Canada and around the world. Canada’s framework for the regulation of our financial system needs to keep pace,” the government mentioned in the press statement.
Government of Canada to Prevent the use of Crypto as a Way to Evade Sanctions
The government mentioned in its statement that money digitalization poses a threat to democratic institutions around the world, highlighting the use of cryptocurrencies for sanctions avoidance.
“In order 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,” the government statement reads.
Earlier this year, Canadians protested in Ottawa about Covid-19 vaccine restrictions implemented by the government. The situation became so heated that the province of Ontario declared a state of emergency.
During the protest, activists received funds as donations through their bank accounts. This forced Prime Minister Justin Trudeau to freeze those accounts after invoking the Emergencies Act. In a reactive pattern, protesters resorted to crypto for donations to fund their activities.
These controversies likely influenced the Canadian Federal Government to consider regulating the digital asset sector. Additionally, the government will investigate ways to best prevent the financing of international terrorism.
Above all, there are positive takeaways from the latest development. It especially highlights how governments and authorities are seeking to embrace the virtual asset sector.
On the Flipside
- Some of the latest details regarding the intention of the Canadian government towards crypto are confusing. For instance, the government announced it had begun consultations with stakeholders regarding virtual currency, CBDC, and stablecoins. However, the government did not specify which stakeholders were involved.
Why You Should Care
It used to be unclear how Canada would accept and tolerate digital assets and how effective enforcement would be. However, following the recent announcements, the government’s stance is more evident and may be able to attract more people to the cryptocurrency sector.