Bank of Canada issues crypto caution

The Bank of Canada has issued a statement reiterating its opinion that cryptocurrencies and the crypto market constitute a high-risk investment and should be treated as such.

Last week, Canada’s central banking body acknowledged that greater institutional investments have been placed in cryptocurrencies but said this has not made the crypto space any safer for the time being.

The statement was part of the bank’s annual report, which focuses on modern-day economic vulnerabilities and other challenges.

“Price volatility stemming from speculative demand remains an important obstacle to the wide acceptance of crypto assets as a means of payment”, the report said.

The main challenge behind this is the lack of “intrinsic value” which is still “difficult to establish”, the bank concluded.

This warning comes at a time when crypto markets have been struggling as Bitcoin’s price came crashing from $64,000 down to $30,000.

Canada’s top financial institution also addressed the popularity of stablecoins, that is currencies backed by the Canadian dollar. According to the bank, having more stablecoins circulating in the economy would hinder the bank’s ability to serve as a lender of last resort, effectively impeding its ability to implement monetary policies.

Regardless, Canada is one of the first countries in the world to approve a Bitcoin ETF, a financial asset designed to track the value of Bitcoin and traded on traditional market exchanges, not crypto exchanges.

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Written by Barney

Co-founder

Barney is co-founder of CryptoGamblingNews.com. When not at work he can usually be found behind a Nikon. He's won numerous international competitions for his photography and volunteers as a content creator for aid organisations in Africa.

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