Paul Baudry (Deputy Governor of the Bank of Canada) was one of the speakers at the Ontario Securities Commission 2021 Dialogue on Tuesday.
The Deputy Governor of the Bank of Canada spoke primarily about the state of Canada’s financial system and the potential risks that could affect its stability.
When asked whether digital currencies pose a risk, he stated that the Bank of Canada (BoC) believes that cryptocurrencies are far from competing with the current financial system.
Hence, crypto is not evolving in a way that poses a systematic type of risk to the financial system.
About Bitcoin and stablecoins, Boudry added:
Some cryptocurrencies such as Bitcoin (BTC) do not play a large role in payments, rather they are prominent simply because investors mostly buy them for speculation.
While stablecoins (backed by coins and fiat assets) have the potential to play a more important role in payments, so it is something a bank should keep an eye on.
While the bank does not believe that cryptocurrencies pose a significant threat to the economy at the moment, “Boudry” stated that it will become more dangerous as the cryptocurrency market grows, noting and commenting on it by saying:
We are not yet at the point of thinking that this is a huge risk to the economy, but it is something we are watching closely.
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