Bank of Canada says crypto poses no significant risk to the economy

Paul Beaudry, the deputy governor of the Bank of Canada, said that cryptocurrencies, at their currency adoption level, do not impose any major risk to the financial system.

On Tuesday, during Ontario Securities Commission Dialogue 2021, Beaudry spoke about the stability concerns related to the Canadian financial system.

The deputy governor, when questioned if cryptocurrencies are a concern, stated that the Bank of Canada does not believe cryptocurrencies are growing in a way that presents a systemic type of risk for a financial system at the moment. Beaudry pointed out that it is because crypto is very isolated from the financial system.

However, as the crypto market expands in size and more players come to participate in it, crypto can become more of a risk, posing a level of vulnerability. As per the statement by the official:

“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.”

Beaudry says Bitcoin doesn’t influence payments

As TheCoinReported, the Bank of Canada hinted in 2019 of developing a national cryptocurrency in the form of CBDC, which shows the country’s positive attitude towards blockchain technology. Recently, regulators also cleared Fidelity Investors, which became Canada’s first Institutional BTC custodian.

Beaudry also added that Bitcoin has just become a speculation tool and does not play much role in payments.

He added that there are many digital assets like stablecoins that are backed by fiat currencies and can potentially play a major role. He added that that’s something the bank is keeping an eye on.

Canada comes among the most crypto-friendly nations in the world. As we reported, Blockchain is one of the highest paying industries in the country. It has also been among the favorite spots for global crypto miners and ranked fourth in terms of the highest hash rate as of August this year.