Question Period: Crypto-currency

By: The Hon. Clément Gignac

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Hon. Clément Gignac: My question is for the Government Representative in the Senate.

Since last spring, we’ve watched the spectacular collapse in the value of several crypto-currencies, including the famous bitcoin, a type of investment recommended at the start of the year by influencers, sports celebrities and even certain political leaders. In the past few weeks, electronic platforms such as FTX and financial intermediaries such as Celsius and BlockFi declared bankruptcy because of poor financial management and even fraud and wrongdoing resulting in financial losses for millions of people.

Senator Gold, it would be unrealistic to think that this issue only affects U.S. citizens. A study released last month by the Ontario Securities Commission indicates that almost 13% of Canadians and up to 25% of young adults between the ages of 25 and 44 have investments in digital assets.

My question, Senator Gold, is the following. While the U.S. Senate is in favour of stricter regulations for digital platforms and crypto-currency financial intermediaries, what does the federal government plan on doing in this file to better regulate this new sector and especially to protect the Canadian public?

Hon. Marc Gold (Government Representative in the Senate): Thank you for the question. The government knows that it’s important to understand the benefits and risks of digital currency and electronic payments, especially in the context of Canada’s financial system. Over the past few months, in Canada and around the world, we’ve seen first-hand the risks associated with the impact that unregulated crypto-currency can have on our economies and our democracies. Globally, we’ve seen dark forces, such as Russian oligarchs, use crypto-currency to get around economic sanctions and fund a brutal war in Ukraine. Nationally, we’ve seen the role played by crypto assets in illegal activities, such as the so-called “freedom convoy.” That’s why the government is soon launching a legislative review of the financial sector focused on the digitization of currency and maintaining stability and security in the financial sector.

I’m told that the first phase of the review will be on digital currencies, including stable crypto assets and crypto-currencies. Also, the government continues to communicate with institutions and international partners about the possible repercussions of digital currency on the global financial system.

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