Bank of Canada: Volatility of crypto assets is an obstacle to accepting payment

The Central Bank of Canada said in its annual review of Canadian financial systems that crypto assets such as bitcoin and other cryptocurrencies remain high risk as it is difficult to determine their intrinsic value, stressing that “the price volatility caused by speculative demand remains an important obstacle to the widespread acceptance of crypto assets as a method of payment” .

The Bank of Canada explained that although the crypto asset market does not currently have systemic significance in Canada, that could change if a major tech company issues a cryptocurrency that becomes widely accepted as a digital payment method. The Bank of Canada is currently developing its own cash-like central bank digital currency that it could issue to the public if the need arises as many other major central banks are doing similar work and added that stable currencies backed by traditional assets are a potential solution to the price volatility of crypto assets even though they are Also risks.