Crypto, an obvious taboo for Canadian banks

The Canadian banking industry still seems unprepared to deal with these “new currencies”. (Photo: Eric McClain for Unsplash)

LES KEYS DE LA CRYPTO is a department that patiently deciphers the world of cryptocurrency, the stock market, and industrial and media turmoil. François Remy’s mission is to identify promising entrepreneurs, decode technical advances, and anticipate the industrial and societal impacts of this digital currency.

(Illustration: Camille Charbonneau)

To better serve the needs of their clients, more and more historical financial players are building deposit and transaction solutions for crypto assets. But the Canadian banking industry still seems unprepared to deal with these “new currencies”.

A reversal of the situation is observed with our southern neighbors. Major banking brands, which were highly critical of Bitcoin and other digital currencies yesterday, are now investing in this market. JP Morgan and Goldman Sachs, but also hundreds of smaller institutions.

The same development could occur in Canada. All banks today have direct or indirect projects involving cryptocurrency. It’s well known to all, but it seems that trends are waiting for a kind of “Go! to buy a product or entity that is active in this emerging market. This is a basic economic mechanism: once there is demand, institutions have no other choice.”

no comment

At the moment, it is difficult for the Canadian “Big Five” and others to publicly promote crypto solutions, which are beyond their control and risk spoiling their activities. Among the ranks of the crypto community, we deplore this technological resistance that is being driven by oligopoly. or strategic risk management. In any case, the state banks do not seem comfortable with the topic.

When asked about developments in the cryptocurrency ecosystem, he thanked the National Bank Business To inquire about the thing, but preferred ‘pass [son] about this time.”

So we turned to the Canadian Bankers Association. same story. The Director of Communications “respectfully” declined our request for comment on the industry.

suspicious surveillance

At BMO Financial Group, the phenomenon of cryptocurrencies remains a trend that we are observing with caution. “While Bitcoin and other cryptocurrencies are beginning to gain more acceptance, they remain highly speculative and subject to significant risks, including regulation, reputation, anti-money laundering, and environmental, social and governance,” said Nuances Marie-Catherine Noel, director of media relations in Quebec. “Our goal is to provide customers with products that deliver long-term value and do so in a risk-effective manner.”

RBC Royal Bank does not provide direct access to cryptocurrencies, nor does it facilitate direct trading or mining. However, the bank [offre] Access to a wide range of investment products, including securities listed on North American markets such as ETFs, with exposure to cryptocurrencies, says Denis Dube, director of communications at Quebec. “We continue to actively monitor the situation and will make necessary updates as needed,” he added.

At TD Bank, too, the topic is closely followed even if the institution does not offer a brokerage service or a cryptocurrency wallet. “We monitor the market and are involved in discussions with industry, regulators and central banks,” explains Carolyn Fimius, Director of Public Affairs at TD Bank Group. The institution’s customers in Canada can also purchase bitcoin and other digital tokens (NFTs) by credit or debit card, as well as trade shares of companies and exchange-traded funds exposed to cryptocurrency.

the color Digital”, another cryptographic threat?

As for the Bank of Canada, it relentlessly condemns the speculative products that are bitcoin and other bitcoin currencies, while acknowledging that it is an exploration of different technologies that can be very useful for other purposes.

Research and development is also accelerating at the Bank of Canada around the central bank’s digital currency, or MNBC. However, the Foundation declines any responsibility for this national initiative. “It’s up to the finance minister to decide,” Finance Minister Teff McClem said in April after the bank’s “monetary policy report” was released.

In the event that Ottawa decides to go ahead with the MNBC issuance, the Bank of Canada will have to manage several challenges such as… the negative impact on bank deposits. In theory, the “digital madman” could create competition for deposit financing for banks and affect revenue and liquidity.

In short, after failing to lead the cryptocurrency movement, all Canadian banks stand ready to respond to their greater adoption.

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