Canada to review 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 “Fall Economic Statement 2022” released November 3 by Deputy Prime Minister Chrystia Freeland functions as a budget update in conjunction with its main annual budget.

The statement included a small section on “Fighting the Digitization of Money” that outlined the government’s crypto plans.

He said the rise of cryptocurrencies and the digitization of money is “transforming financial systems in Canada and around the world” and that regulation of the country’s financial system “must keep pace.”

The statement said the digitization of money “poses a challenge to democratic institutions around the world,” highlighting cryptos use to avoid penalties and financing of illicit activities both at home and abroad.

In the statement, the government said that consultations with stakeholders on digital currencies, stablecoins and CBDCs would be launched on November 3, although the exact stakeholders who will be engaged remain unclear.

The announced consultations are part of the government’s intention to launch a “legislative review of the financial sector focusing on the digitization of the currency and the maintenance of the stability and security of the financial sector”, which was part of the 2022 budget published on April 7.

This review will also examine the “potential need” for a Canadian CBDC in light of these risks.

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

In January, protests erupted in the nation’s capital of Ottawa over Canada’s COVID-19 vaccine mandate and restrictions with protesters migrate to crypto fundraising platforms after being launched on competing fiat fundraising platforms.

The province of Ontario declared a state of emergency on February 11 due to roadblocks by protesters that led to a freeze on its government millions of donations to the protesters, at the time the protesters raised about 21 Bitcoin (BTC), worth $902,000.

Prime Minister Justin Trudeau invoked the Emergencies Act on February 14 for the first time in Canadian history, giving it the power to freeze protesters’ bank accounts and monitor “large and suspicious transactions,” including crypto.

Two days later, the federal police of Canada sent letters to multiple crypto exchanges demanding that they stop processing transactions from more than 30 specific crypto wallet addresses linked to the ongoing protests.

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