KPMG Report: Increasing Crypto Adoption by Canadian Institutions Amid US Debt Concerns

According to the Daily Hodl: KPMG Finds Rising Crypto Adoption Among Institutional Investors due to US Debt Concerns Big Four accounting firm KPMG has highlighted the growing interest among investors in cryptocurrencies as a countermeasure against fiat currencies' debasement by central banks, amidst soaring national debt in the US. In a recent report, KPMG focused on the Canadian market and found that by 2023, 50% of financial service providers partaking in their poll offered crypto asset services, a notable increase from 41% in 2021. Further, the study uncovered that 39% of Canadian institutional investors had crypto exposure in 2023, a rise from 31% in 2021. Kareem Sadek, the Emerging Technology Risk leader and co-leader of KPMG’s Digital Assets practice, attributed the growing comfortability of Canadian institutional investors with cryptocurrencies to two major factors. “Firstly, Canada's leadership in developing a regulatory environment that fosters crypto asset innovation, like approving the first Bitcoin and Ethereum exchange-traded funds and permitting sophisticated strategies involving derivatives and Ethereum staking," remarked Sadek. "Secondly, the upswing in crypto asset prices, attracting institutional investors to the crypto sector." Kunal Bhasin, partner and co-leader of KPMG in Canada’s Digital Assets practice, added that incarnate institutions were turning to crypto assets as a potential foil against the devaluation of national currencies. He emphasized, “the escalating US debt coupled with inflating inflation was likely a trigger for the 2023 crypto rally. It seems investors are in search of alternative asset classes that serve as a hedge against debasement and a reliable store of value. Our survey responses suggest that crypto assets are increasingly viewed as a viable alternative asset class by institutional investors and financial service organizations in Canada."