FinancialCentre Reports – Canada’s Financial System is safe from Crypto, Governor Bank of Canada

London, UK, 4th Dec 2021, ZEXPRWIRE, Cryptocurrency is a way of exchange that utilizes cryptography to enhance the security of transactions. Today, cryptocurrencies are being used for buying goods, investing, trading and money transfers. There has been an increased interest in these currencies with high returns on investment (ROI), making them popular amongst all walks of life. Compared to other types of traditional currency like the rupee, dollar or pound, cryptocurrencies are relatively new, and investors still see potential in their growth.

There is a lot more to it

Cryptocurrencies are not just limited to an exchange of goods, and they can now be used as a mode of transaction for people to buy real estate. FinancialCentre Broker Nathan Banks says that the main benefit is the anonymity it offers. Investors are no longer required to go through banks or brokers, so there are no middlemen involved either. One can save on significant amounts of money by investing in real estate through cryptocurrencies.

There are different methods of cryptocurrency investment. Some people will invest their money by buying a certain cryptocurrency and holding it for a while. As soon as the value rises, they sell it off to make a profit. This is called trading or holding.

The fact that cryptocurrencies have been gaining popularity at an exponential rate means that they are currently the hot topic on everyone’s lips. There have been numerous debates about them being used as a way of exchange or as an investment. Some say they are the future of currency, while others argue that investing in them is like gambling with one’s money. Most countries still do not regulate cryptocurrencies, which leaves it up to the consumer to decide whether or not they want to take risks on their own by investing in them.

One can either buy cryptocurrency through an exchange or make investments in them by holding onto them until they increase in value. Cryptocurrencies are not limited to an exchange platform; there are certain companies that accept these currencies as payment for their services. As more and more people become interested in cryptocurrencies, it means that the user base is increasing exponentially. This also means that investors will be dealing with a larger pool of money. This is not to say that they are the easiest currencies to understand or invest in, but there is a lot of potential when it comes to their returns on investment.

Threats posed by crypto

The biggest challenge faced is that of security. It is a digital currency, and as such, the biggest threat that exists for this type of money is cybersecurity. Hence, it is important to only invest in cryptocurrencies through trusted platforms so as not to lose your investment to hackers. Apart from this, cryptocurrencies are volatile, and this means that the value keeps fluctuating. Those who have been investing for a long time can see significant changes in their returns on investment as well as the cryptocurrency’s value. Mr Banks says that countries see crypto as a threat to their currency because of the anonymity it offers. Countries that have a low inflation rate will see their currency become less valuable when people invest in cryptocurrencies. The government can’t regulate it, and this is why they are trying to put an end to cryptocurrencies.

There are many countries that have already legalized cryptocurrencies as a method of exchange. They have created their own cryptocurrency, which means that people can do transactions with them without having to invest in other currencies.

Bank of Canada and Crypto

Bank of Canada is a reserve bank, which regulates the financial sector of the economy. The Bank has been actively looking into crypto to be able to understand it well enough so that they can regulate it in the future. Despite all the global criticism and efforts to regulate crypto, Mr Paul Beaudry, who is the deputy governor at the Bank of Canada, says that they are not considering it as a threat to the financial system just yet because of its limited use. The fact that today, there are only very few retailers who accept cryptocurrencies also poses another problem for this to become an actual threat to the worst-case scenario, one day down the line.

Mr Beaudry says that he is still keeping an eye on the entire situation, but the more typical cryptos like Bitcoin are not playing an integral role in the sector of payments. However, Mr Banks thinks that while decentralized currency does not pose a risk to the country’s financial system, it is still something that needs to be evaluated before more policies can be made. This statement he gave keeping in mind the fact that there have been several cases of the government being unable to track the flow of money in and out of a country’s financial system.

Disclaimer: Our content is intended to be used for informational purposes only. It is very important to do your own research before making any investment based on your own personal circumstances. You should take independent financial advice from a professional in connection with, or independently research and verify, any information that you find on this article and wish to rely upon, whether for the purpose of making an investment decision or otherwise.