The staff note suggested that, although the DeFi ecosystem brings a ton of innovations in the financial sector, the regulatory challenges and vulnerability limit its potential use in traditional finance.
Central banks will face unfamiliar challenges to achieve CBDC inclusivity, study says
The potential is there, but the difficulties in achieving financial inclusivity are often underestimated, a Bank of Canada study shows.
Canadians have ‘weak incentives’ to use a CBDC: Bank of Canada
A central bank discussion paper found that the majority of Canadians have little trouble accessing financial services, which gives them little reason to use a CBDC.
Canadian crypto ownership declined amid tight regulations, falling prices
The biggest motivation for Canadians interested in Bitcoin is an investment — as showcased by the choice of over one-third of the 4,996 respondents in the Bank of Canada’s 2022 survey.
Bank Of Canada Study Shows Crypto Ownership In The Country Fell In The Last 2 Years
A recent study by the Bank of Canada (BoC) has shown a decline in the ownership of cryptocurrencies over the two years. The BoC has attributed this decline in crypto ownership to ecosystem collapses, regulatory hurdles, and price depreciation.
Bitcoin’s Decline Most Notable
According to the Bitcoin Omnibus Survey, Bitcoin’s ownership across the country dipped to 10% at the end of last year. This decline has been attributed to various factors, including the significant drop from its all-time high due to the current market conditions, especially since Bitcoin’s price crashed over 50% from its all-time high of $69,044.77 last year.
The survey also cited FTX’s unexpected collapse as contributing to the decline, as it prompted enhanced scrutiny from regulators while also creating doubts in the hearts of crypto investors.
The decline in Bitcoin ownership wasn’t a result of investors moving their money to other crypto assets given that altcoins also suffered a similar fate to Bitcoin, as ownership in these digital assets also experienced a downward trend last year.
The report read:
Investors did not appear to shift out of Bitcoin and into other cryptoassets, as we observe decreased ownership of altcoins.
There are some positives for Bitcoin and the crypto ecosystem, as Bitcoin’s ownership is still higher than the 8% recorded between 2018 and 2020. Another silver lining is that many locals are aware of Bitcoin (meaning they could invest in it in the near future), as general awareness of the token has been at an impressive 90%.
However, despite being aware of the term Bitcoin, many Canadians still don’t understand how the cryptocurrency operates. According to the BoC’s research methodology, 61% of non-bitcoin owners showed low crypto literacy. Meanwhile, a meager 30% of Bitcoin owners exhibited high-level crypto literacy.
Financial Literacy Doesn’t Equate To Crypto Enthusiasm
Many would have predicted that persons with higher financial literacy would be more bullish on Bitcoin and other crypto assets. However, that isn’t the case in Canada, according to the survey. Interestingly, respondents with a high financial literacy were the ones who were quick to exit the crypto market. In contrast, those with a lower financial literacy remained bullish despite the market conditions and regulatory concerns.
While these figures may not be so encouraging, there is enough reason to believe that the growing adoption of cryptocurrencies worldwide will impact the future of crypto ownership in the country as more locals gain crypto literacy.
Furthermore, efforts from the authorities to provide regulatory clarity could also help as it will boost investors’ confidence in the country and consequently increase crypto ownership in the country.
7 central banks and BIS continue examination of ongoing policy issues for retail CBDC
The Bank for International Settlements has published the fifth paper by the group, highlighting its latest thinking on a potential retail CBDC.
Canada’s central bank asks citizens what they want in a digital dollar
Canadians are being asked what features they wish to see in a digital Canadian dollar even though there are no plans yet to issue one.
US explores additional bank support favoring First Republic’s benefit: Report
Despite banking laws stating that remedies should not be aimed at benefiting a specific bank, this change could be structured “in a way to ensure” First Republic benefits, according to unnamed sources.
Canadian central bank identifies retail CBDC archetypes in theory-heavy analysis
An analyst at the Bank of Canada has written a paper that identifies recurring patterns in CBDC models and how those patterns impact a list of performance criteria.
Canadia’s new opposition leader is a Bitcoiner
The new Conservative Party of Canada leader has previously advocated for financial freedom through crypto tokens, smart contracts and decentralized finance.
3 questions on financial literacy Bitcoiners flunk: Bank of Canada
“In particular, Canadians who were young, male, employed, had a university degree, high household income and relatively low financial literacy were more likely to own Bitcoin.”
Quantum computing firm simulates adoption of crypto payments
“We wanted to test the power of quantum computing on a research case that is hard to solve using classical computing techniques,” said Maryam Haghighi.
Crypto poses no big risk to economy so far, Bank of Canada official says
Canada is one of the first countries to approve a Bitcoin ETF and is the fourth-largest nation in terms of hash rate.
Study suggests Canadian CBDC could promote digital innovation within the country
The Bank of Canada suggested that a Canadian CBDC could provide a number of innovations, including the elimination of transaction fees from debit and credit cards.
Bank of Canada sees no strong case for a digital dollar — for now
Amid the global CBDC race, the Canadian central bank does not currently see a strong case for issuing a state digital currency.
Bank of Canada: Crypto highly risky despite institutional adoption
Crypto volatility is an emerging vulnerability to Canada’s financial system, while stablecoins pose risks for the country’s monetary system, the Bank of Canada said.
Bank of Canada Governor Says Digital Dollar Project Moving Past Trial Stage
Tiff Macklem said Canada’s digital dollar initiative is progressing past the experimental phase and that the G7 needs to coordinate on digital currencies.
Wanted: Economist for Digital Currencies, Fintech as Bank of Canada Studies a Possible CBDC
The move comes as the central bank continues to research how a central bank digital currency would work as well as the possible risks.
Canada’s Central Bank Is Serious About Designing a CBDC, Job Posting Reveals
The Bank of Canada is preparing to design its own central bank digital currency (CDBC), detailing its plans in a new job posting.
Bank of Canada Won’t Issue Its Own Crypto Unless Libra Succeeds: Deputy Governor
The Bank of Canada does not see the need to create a central bank digital currency unless a competitor – like Libra – starts dethroning the existing fiat.
