Bank of Canada Investigates Flash Loans: Potential Risks and Implications for Financial Stability

The Bank of Canada recently released an internal research discussion paper on March 21, examining the potential risks and policy implications associated with flash loans. The report defines these blockchain-native financial tools as allowing users to borrow crypto assets without collateral, provided they are repaid within a single atomic transaction. This study is part of the central bank’s broader effort to assess the impact of emerging technologies on financial stability and market structure. ]