Crypto Regulation Ought to Keep Pace With Market Growth: BoC Official

Bank of Canada’s (BoC) Senior Deputy Governor, Carolyn Rogers, cited the rapidly growing number of Canadians possessing cryptocurrencies while pointing at the need for crypto regulations to keep pace with market growth.

As crypto-assets become an integral part of Canada’s financial system, the inherent chance of vulnerabilities also surges since most people have low financial literacy, which could end up impacting the broader financial system.

While speaking in an interview, Rogers stated: “This (digital assets) is an area that is still small, but it’s growing really rapidly. And it is largely unregulated. We don’t want to wait until it gets a lot larger before we bring regulatory controls in place.”

She further mentioned that people see cryptocurrency as an opportunity for quick money, without realizing the volatility or even the unregulated nature of the market. To substantiate her argument she cited the recent market crash that soured the high-risk assets’ appetite, causing significant financial losses to many investors globally.

Roger believes that the industry needs to be regulated, however, the challenge is to find out an appropriate way of doing it. Speaking of which, she opined:

These are somewhat like banking assets, somewhat like capital markets. One of the challenges is to figure out how do they fit in the current regime, and if they don’t fit, how do we adjust the regime so that they will fit.

According to a report by BoC titled ‘Bitcoin Awareness, Ownership, and Use: 2016-20,’ published in April 2022 by ‘The Globe and Mail,’ the value of the global crypto-asset market skyrocketed from $200 billion to $3 trillion within a few months from early 2020. Moreover, the share of Canadians who own bitcoin has inflated from 5% in 2020 to 13% in 2021.