The Bank of Canada published a staff discussion paper on March 21, analyzing the relevance of flash loans for policymakers and potential risks. Flash loans are blockchain-native tools that allow users to borrow crypto without collateral if repaid in a single transaction. The paper also raised concerns about financial stability and documented the development and usage of flash loans from 2018 to early 2025, identifying trends and usage patterns. Flash loans have facilitated vulnerabilities in DeFi protocols, leading to financial losses in some cases.

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