According to the report, the notable increase in bitcoin ownership last year reflects easier access to the cryptocurrency through mobile applications, as well as increased investments in general by Canadians.
The figure on Bitcoin ownership for 2021 is from the Bank’s Bitcoin Omnibus Survey, a yet-to-be-released survey by the Canadian central bank.
The bank further said in its report that the median holding of BTC among Canadians stood at about CAD 500 (USD 393). It noted that bitcoin is primarily used as an investment among Canadians, and that it is seeing less use as a method of payment due to “high transaction costs” and “significant volatility.”
The central bank warned in its report that “sudden price corrections mean that investors who hold these types of cryptoassets can be exposed to significant financial losses,” while referring to how bitcoin and ethereum (ETH) have been “four to five times more volatile throughout 2021 than the S&P 500 stock market index.”
Meanwhile, the bank stressed repeatedly that cryptoasset markets in general are not yet large enough to be of “systemic importance.”
The view that crypto is still no threat to the broader financial markets was reinforced in May 2022 when the major crypto market sell-off turned out to be “broadly inconsequential for the traditional financial system in Canada and abroad,” the bank said.
Still, the central bank report made it clear that although crypto markets remain small on a global scale, they have grown rapidly, with growth largely outpacing global efforts to regulate them. “Risk is therefore rising,” it argued.
In line with the rapid growth, the Canadian central bank also admitted that cryptoassets are “becoming more integrated into the traditional financial system,” for instance through the development of crypto derivatives markets, as investment assets, or as collateral for loans.
This increases the risk that “shocks” in crypto markets could affect the broader financial system, the report said.