(Bloomberg) — The Bank of Canada’s former No. 2 argued the country needs to build framework to make cryptocurrency “as safe as our financial system.”
Carolyn Wilkins, in an opinion piece Wednesday for the Financial Post newspaper, said the cryptocurrency space is advancing in a largely unregulated way, with few guardrails for financial stability, investor protection and market integrity. That means it’s not “entirely safe,” she said.
To address this, Canada needs “clear and proportionate legal and regulatory frameworks,” she said, adding the nation can look to efforts by the Bank of England and other global peers for its regulatory response. (Wilkins is now a member of the U.K. central bank’s financial policy committee.)
“Canada needs to be as ambitious in creating modern legal, policy and regulatory frameworks for the crypto ecosystem,” said Wilkins, who was senior deputy governor at the Bank of Canada from May 2014 to December 2020. “If done well, we just might realize the promise of reinvention and expansion for those who rely on efficient and trustworthy financial services.”
Her comments come a week after Conservative lawmaker Michelle Rempel Garner called on Prime Minister Justin Trudeau’s government to start taking digital currencies seriously. Rempel Garner’s proposed law would task the finance minister with setting up a national framework to woo investors. Financial executives are also pushing the government to act on crypto, in part to help diversity the nation’s resource-heavy economy.
There’s been an increase in scrutiny of digital currencies in Canada due to fundraising in Bitcoin by some organizers of the trucker convoy that’s been occupying Ottawa for nearly three weeks. In invoking emergency powers to quell the protests Monday, Finance Minister Chrystia Freeland said the government will specifically target crypto platforms as part of its bid to choke off the flow of money to the demonstrators.
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