According to a report by accounting organization KPMG, the financial technology sector in Canada witnessed a surge in investments, with crypto and blockchain leading the way.
Released on Feb. 6, the KPMG report highlighted that despite a significant drop in deal volumes and values in 2023, the crypto and blockchain sector maintained its prominence, with 31 deals recorded, surpassing other verticals in the fintech landscape. The software-as-a-service (SaaS) industry followed closely with 24 deals, while artificial intelligence (AI) and machine learning recorded 15 deals.
Edith Hitt, a partner at KPMG, noted that investor enthusiasm for crypto-related fintech projects was fueled in part by the anticipation of spot Bitcoin exchange-traded fund (ETF) approvals by the United States Securities and Exchange Commission (SEC). Hitt emphasized the potential impact of a Bitcoin ETF approval on Canadian fintech investment and technological advancements in the digital assets space.
Highlighting one of the significant fintech investments in Canada in 2023, Hitt pointed to a blockchain infrastructure firm, indicating a rising interest in blockchain technology within the region. She suggested that investors are forward-thinking, considering the potential role of blockchain in a future where a central bank digital currency (CBDC) might become a reality in Canada.
Despite speculation about a potential CBDC, its adoption in Canada faces skepticism. In August 2023, a discussion paper by the Bank of Canada highlighted challenges, noting that consumers might lack incentives to use a CBDC due to existing accessibility to financial services.
A survey conducted on Nov. 30 confirmed the central bank’s concerns, revealing that individuals aware of CBDCs were hesitant to adopt them compared to those unaware of the technology. This suggests that while CBDCs are on the radar, challenges remain in fostering widespread acceptance and usage among consumers.
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