The Canadian Association of Alternative Assets and Strategies (CAASA) and KPMG Canada recently produced a survey that indicates the country's acceptance of cryptocurrencies is growing. Canada has made a comeback to the emerging cryptocurrency markets by adopting a stronger regulatory framework, and businesses and investors are again actively engaged in the industry.
The report indicates that there has been a 22%+ increase in crypto services offered by Canadian financial institutions in 2023 as compared to 2021. Furthermore, a quarter of an increase in institutional investors' portfolios consists of digital assets.
2021 reportedly proved to be a successful year for cryptocurrency assets as investors were drawn to the upbeat market. The long crypto winter of 2022, according to Kunal Bhasin, partner and co-leader of KPMG in Canada's Digital Assets practice, had a "cleansing effect on the industry," but the following year was a "turbulent year, marked by fraud and collapses of major crypto asset trading firms." Additionally, he added,
"The 2023 cryptocurrency boom was probably sparked by rising U.S. debt and rising inflation, and it seems investors are searching for other asset classes that might serve as a hedge against depreciation and a dependable store of wealth. According to the results of our poll, cryptocurrency assets are becoming more and more regarded as a viable alternative asset class in Canada."
The poll also showed that, compared to 41% in 2021, 50% of financial services companies now provide at least one cryptocurrency service. Twenty-four percent of these financial service companies offered regulated products such as exchange-traded funds. Furthermore, just 33% of the companies supplied custody, clearing, and settlement services in 2021, compared to 48% in 2023.
Furthermore, from 31% in 2021 to nearly 40% in 2023, institutional investors were exposed to cryptocurrencies either directly or indirectly. Notably, 75% of investors directly owned cryptocurrency assets, while 50% were connected to the market through exchange-traded funds (ETFs) and other regulated products.
April 2024, Cryptoniteuae