Canada to examine crypto, stablecoins, and CBDCs in new budget


The Canadian federal government is set to launch a consultation on cryptocurrencies, stablecoins, and Central Bank Digital Currencies (CBDCs) as revealed in its new mini-budget.

The government’s ā€œ2022 Fall Economic Statementā€ released on Nov. 3 by Deputy Prime Minister Chrystia Freeland works as a fiscal update in conjunction with its main yearly budget.

The statement included a small section on ā€œAddressing the Digitalization of Moneyā€ that outlined the governmentā€™s crypto plans.

It said the rise in cryptocurrencies and money digitalization is ā€œtransforming financial systems in Canada and around the worldā€ and the countryā€™s financial system regulation ā€œneeds to keep pace.ā€

The statement opined that money digitalization ā€œposes a challenge to democratic institutions around the worldā€ highlighting cryptos use in sanctions avoidance and illicit activity financing both domestically and abroad.

In the statement, the government said consultations with stakeholders on digital currencies, stablecoins, and CBDCs are being launched on Nov. 3 although exactly which stakeholders will be engaged remains unclear.

The announced consultations is understood to be as part of the governmentā€™s intention to launch a ā€œfinancial sector legislative review focused on the digitalization of money and maintaining financial sector stability and security,ā€ which was part of the 2022 budget released on Apr. 7.

This review will also examine the ā€œpotential needā€ of a Canadian CBDC in light of these risks.

Related: Quebec’s energy manager to seek government approval to stop powering crypto miners

In January protests broke out in the nation’s capital of Ottawa regarding the COVID-19 vaccine mandate and restrictions in Canada with protestors migrating to crypto fundraising platforms after being kicked off competing fiat fundraising platforms.

The province of Ontario declared a state of emergency on Feb. 11 due to the protestorā€™s road blockades resulting in its government freezing millions in donations to protestors, at the time protestors raised around 21 Bitcoin (BTC), worth $902,000.

Prime Minister Justin Trudeau invoked the Emergencies Act on Feb.14 for the first time in Canadaā€™s history giving him the power to freeze protestersā€™ bank accounts and monitor ā€œlarge and suspicious transactions,ā€ including crypto.

Two days later Canada’s federal police force sent letters to several crypto exchanges demanding they stop processing transactions of more than 30 specific crypto wallet addresses linked to the ongoing protests.

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