Digital currencies, such as Bitcoin, are not covered by the deposit insurance system stresses the Canada Deposit Insurance Corp. (CDIC).
The CDIC said Wednesday that while the use of private digital currencies is becoming more common, its deposit insurance scheme only covers deposits in Canadian dollars at member financial institutions, such as federally-regulated banks and credit unions. And, it notes that its coverage of up to $100,000 for eligible deposits only relates to the failure of an institution, it does not cover losses due to fraud.
“We recognize that Canadians are using new technologies to make payments, but they should be aware that CDIC deposit insurance coverage is limited,” said CDIC president and CEO, Michèle Bourque. “When it comes to your deposits, it’s important to get the whole picture.”
In the latest federal budget, the government indicated that it is planing to review the existing deposit insurance system to, “ensure that deposit insurance provides adequate protection for the savings of Canadians, taking into account lessons from the recent financial crisis and significant shifts in the global banking landscape.” (See Investment Executive, Ottawa to toughen anti-money laundering rules, February 11, 2014.)