{"id":484068,"date":"2022-08-11T14:31:24","date_gmt":"2022-08-11T11:31:24","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/why-crypto-went-kaboom-macleans-ca\/"},"modified":"2022-08-11T14:31:24","modified_gmt":"2022-08-11T11:31:24","slug":"why-crypto-went-kaboom-macleans-ca","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/why-crypto-went-kaboom-macleans-ca\/","title":{"rendered":"#Why crypto went kaboom &#8211; Macleans.ca"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a2f1692ad122\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a2f1692ad122\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/why-crypto-went-kaboom-macleans-ca\/#%E2%80%9CWhy_crypto_went_kaboom_%E2%80%93_Macleansca%E2%80%9D\" >&#8220;Why crypto went kaboom &#8211; Macleans.ca&#8221;<\/a><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9CWhy_crypto_went_kaboom_%E2%80%93_Macleansca%E2%80%9D\"><\/span>&#8220;Why crypto went kaboom &#8211; Macleans.ca&#8221;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<div>\n                            To gain credibility in Canada post-crash, the crypto industry is going to have to get serious about regulation.\n                        <\/div>\n<div>\n<div id=\"attachment_1238576\" style=\"width: 411px\" class=\"wp-caption alignright\"><img loading=\"lazy\" decoding=\"async\" data-sizes=\"auto\" class=\"wp-image-1238576 lazyload\" src=\"https:\/\/www.macleans.ca\/wp-content\/uploads\/2022\/07\/RyanClements.jpg\" alt=\"\" width=\"401\" height=\"301\"\/><\/p>\n<p class=\"wp-caption-text\">Ryan Clements is an assistant professor and chair in business law and regulation at the University of Calgary<\/p>\n<\/div>\n<p class=\"p1\">R<span class=\"s1\">ight now,<\/span><span class=\"s2\"> there are<\/span> more than 20,000 kinds of cryptocurrency in the world. This goes against one of the central ideas of Bitcoin\u2014the very first cryptocurrency\u2014which promised a cap on supply. Crypto was supposed to be many things: a kind of \u201cdigital gold,\u201d something that you put money into when there\u2019s turbulence; a store of value; and a medium of exchange with a decentralized financial system. So far, it\u2019s been too volatile to fulfill any of those functions.<\/p>\n<p class=\"p3\">There aren\u2019t exact figures, but survey data suggests that about 14 per cent of Canadians hold some crypto. The crash we saw this year\u2014during which the crypto economy lost US$2 trillion in mere months\u2014is partly because, in the midst of an already rocky economy, people are selling off crypto as the riskiest asset in their portfolio. The other problem is the broader world of decentralized finance, or DeFi. DeFi uses blockchain <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/technology\/\" data-internallinksmanager029f6b8e52c=\"4\" title=\"Technology\" target=\"_blank\" rel=\"noopener\">technology<\/a> to replicate traditional financial services\u2014like exchanges, banks, lenders and asset managers\u2014in a way that\u2019s cheaper <span class=\"s4\">and faster than legacy institutions. In re<\/span>ality, DeFi has become an opaque system that lacks the regulatory oversight that helps Canadians trust traditional banks.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<p class=\"p3\"><span class=\"s5\">One example of this lack of oversight is the case of Anchor, a lending-and-borrowing protocol from the creators of the cryptocurrency Terra. At one point, Anchor was offering investors 20 per cent interest just <\/span>for making deposits. How was that pos<span class=\"s5\">sible when traditional banks were paying customers close to nothing? This is exactly the kind of behaviour that led to the spring crash: Anchor failed, and Terra\u2019s Luna token collapsed\u2014plummeting from US$80 per token to less than US$1. All of that carried over to Celsius Network, which touted itself as the world\u2019s leading crypto lender before freezing withdrawals for its 1.7 million customers in mid-June. By July, Celsius had filed for bankruptcy.<span class=\"Apple-converted-space\">\u00a0<\/span><\/span><\/p>\n<p class=\"p3\">When you look at who invests in crypto, it\u2019s easy to see that it\u2019s not the democratic <span class=\"s4\">financial system it was promised to be. A very small number of players have mas<\/span>sive amounts of assets. Those are the so-called \u201cwhales\u201d in the market, and when they sell off large positions, there are catastrophic effects on prices.<\/p>\n<p class=\"p3\">In order for crypto to become a part of most Canadians\u2019 lives\u2014to get that 14 per cent up to 90\u2014it has to play a function other than simply sliding up and down. Otherwise, people could just watch the stock market, where it\u2019s easier to invest and the value of your assets is more transparent. Crypto investors need to be able to use it in ways that have been discussed but not fully realized, like getting a business loan or transferring money safely across the world.<\/p>\n<p class=\"p3\"><span class=\"s6\">What could help move it in this direction is more regulation. Canada is already ahead of the curve when it comes to regulating crypto exchanges and assets that have properties similar to traditional securities. But there are a few more areas that need attention: first, Canada needs to extend its regulatory framework to stablecoins, which claim to be more trustworthy than other crypto because they are pegged to real money. (Terra has demonstrated otherwise.) Stablecoins need to be better defined and subject to consumer protections.<\/span><\/p>\n<p class=\"p3\">Second, the federal and provincial governments may need to enact legislative solutions that bring the DeFi system under the supervision of the securities regulator. In the United States, the SEC has recently proposed steps to regulate certain DeFi exchanges; it\u2019s possible to do that in Canada, too. Promotion needs to be regulated, too. A bunch of investors got into crypto just because Matt Damon told them to be brave. People need to understand that cryptocurrencies are not the same as money. Crypto deposits, like Celsius, are not backed by the Canada Deposit Insurance Corporation. Crypto banks are not like real banks at all\u2014there are no protections if they go bankrupt.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<p class=\"p3\">Some say crypto will get wiped to zero, while others say it\u2019s the entirety of our financial future. I agree with Jon Cunliffe, a deputy governor at the Bank of England, who recently likened the crypto crash to the dot-com crash of the late 1990s. \u201cA lot of <i>companies<\/i> went, but the technology didn\u2019t go away,\u201d he said at the Point Zero Forum in Z\u00fcrich. \u201cThose that survived\u2014the Amazons and the eBays\u2014turned out to be the dominant players.\u201d Those players just need to be trustworthy.<\/p>\n<hr\/>\n<p><em>This is part of the Maclean\u2019s Guide to the Economy, which <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>eared in the September 2022 issue. Read the rest of the package, order your\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/canadianmags.ca\/products\/macleans-september-2022\">copy of the issue<\/a>, and <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/secure.macleans.ca\/\">subscribe to the magazine<\/a>.\u00a0<\/em><\/p>\n<p><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/canadianmags.ca\/products\/macleans-september-2022\"><img loading=\"lazy\" decoding=\"async\" data-sizes=\"auto\" class=\"aligncenter wp-image-1238850 lazyload\" src=\"https:\/\/www.macleans.ca\/wp-content\/uploads\/2022\/08\/SeptemberCover-1.jpg\" alt=\"\" width=\"287\" height=\"391\"\/><\/a><\/p><\/div>\n<p><script async defer crossorigin=\"anonymous\" src=\"https:\/\/connect.facebook.net\/en_US\/sdk.js\"><\/script><\/p>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/www.macleans.ca\/economy\/canadian-economy-guide-2022-crypto\/\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;Why crypto went kaboom &#8211; Macleans.ca&#8221; To gain credibility in Canada post-crash, the crypto industry is going to have to get serious about regulation. Ryan Clements is an assistant professor and chair in business law and regulation at the University of Calgary Right now, there are more than 20,000 kinds of cryptocurrency in the world&#8230;.<\/p>\n","protected":false},"author":1,"featured_media":484069,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/www.macleans.ca\/wp-content\/uploads\/2022\/08\/rc_social-766x431.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[132264],"class_list":["post-484068","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-guide-to-the-economy-2022"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/484068","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=484068"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/484068\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/484069"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=484068"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=484068"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=484068"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}