In its own report, the Bank of Canada (BOC) talked about stablecoin regulation.
In a report titled “Potential Benefits and Major Risks of Fiat Reference Cryptocurrency” (from now on called “stablecoins”), released on the 20th, the Bank of Canada gave its opinion on how to regulate stablecoins.
The report emphasised that the global market for stablecoins grew by a factor of 30 from the beginning of 2020 to the middle of 2022, reaching US$161 billion. Stablecoins are used as keys and payment methods in cryptocurrency exchanges. They also act like legal tender, which means they need to be handled with care and regulated in a reasonable way.
“Stablecoins have the potential to take on many of the roles of money, and if designed and regulated well, they could make payment services in a digitalized economy more efficient and competitive,” the report said.
But it said that “the stability of the financial system can be put at serious risk if there aren’t enough safeguards.”
In particular, the report pointed out that one of the risks of stablecoins is that they can be controlled by a few people. The report said that Tether (USDT), USD Coin (USDC), and the Binance Dollar (BUSD) make up 44% and 33% of the market, respectively. %, which adds up to 13%,” he said.
“In the same way, the top 1% of investors own about 90% or more of all major stablecoin assets.”
The Reserve Bank of Canada said, “Most existing regulatory frameworks in Canada and elsewhere are not good enough to spread the risk of cryptocurrencies.” We will try to come up with and put into place a timely and thorough regulatory approach that makes sure