According to a report released by the Bank of Canada, the number of bitcoin holders has doubled from 5% in 2020 to 13% in 2021.
As the cryptocurrency market experiences one of its worst downtrends, there is a silver lining, especially if you live in Canada. In a report released five days ago, the Bank of Canada revealed that the number of bitcoin holders nearly tripled from 5% to 13% from 2020 to 2021.
On average, bitcoin amounted to $500, with most holders using BTC for speculation because of the high degree of volatility preventing its use as a form of payment.
“The price of cryptocurrencies such as bitcoin and ether was generally four to five times more volatile than the S&P 500 stock market index throughout 2021.”
However, the bank noted that the stablecoin is pegged to a fiat currency and backed by liquid reserves, providing some relief from the volatility of other cryptos if issuers can honor redemption requests.
Crypto ties on the rise in traditional markets, says report
Cryptocurrencies are more strongly associated with traditional finance through derivative instruments or as collateral for lending, increasing the potential for crypto market shockwaves to affect the macroeconomic environment. Therefore, the report states that governments should coordinate regulatory efforts to prevent criminals from taking advantage of loopholes. The Bank of Canada has an official in charge of regulatory issues, the Financial Stability Board of the Stablecoins Working Group, responsible for coordinating regulatory efforts around stablecoins.
Canada’s approach to digital regulation exists at the provincial level. However, the federal government in its 2022 budget announced a legislative review of the financial sector, with digital currencies being given top priority.
In March, US President Joe Biden signed an executive order directing a number of government agencies to research cryptocurrencies and, among other things, protect investors and prevent the illegal use of cryptocurrencies for money laundering and terrorism financing. was to coordinate efforts to draft comprehensive rules.
Canadian Pension Fund invests $150M in Celsius
Celsius Network, whose current Chief Financial Officer Rod Bolger previously served as CFO of Royal Bank of Canada, the largest Canadian bank by market capitalization, called for the company to be “in a better position” over time. Withdrawals paused to honor redemption requests. “Another TerraUSD scenario sparks fears. The TerraUSD stablecoin collapsed last month as it could not maintain its peg to the US dollar after several withdrawal requests.
Ignoring warnings from US state regulators on Celsius’ interest-bearing products, financial professionals managing the Canadian province of Quebec’s $326.7 billion pension fund invested in Celsius along with Westcap Group, a venture capital firm that bought loans from the lender. pocketed $400 million. The official position of Caisse de Depot et Placement du Québec (CDPQ), the company that managed the pension fund at the time, was that its $150 million contribution was a bet to disrupt the potential of blockchain.