Canada’s government stated its concerns on the risks digital assets and the digitalization of money may pose to its financial system as a reason for launching the consultation.
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 “2022 Fall Economic Statement” 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 “Addressing the Digitalization of Money” that outlined the government’s crypto plans.
It said the rise in cryptocurrencies and money digitalization is “transforming financial systems in Canada and around the world” and the country’s financial system regulation “needs to keep pace.”
The statement opined that money digitalization “poses a challenge to democratic institutions around the world” 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 government’s intention to launch a “financial sector legislative review focused on the digitalization of money and maintaining financial sector stability and security,” which was part of the 2022 budget released on Apr. 7.
This review will also examine the “potential need” 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 protestor’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 Canada’s history giving him the power to freeze protesters’ bank accounts and monitor “large and suspicious transactions,” 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.