The Bank of Canada has released an in-depth study on flash loans—zero-collateral blockchain-based loans—and their policy implications. The report highlights the potential to extend flash loans to tokenized financial systems, and warns of systemic risks if adopted in traditional finance.

From 2018 to early 2025, nearly 24 million flash loan transactions took place, totaling over $3 trillion across 11 EVM-compatible blockchains.

Over 75% of the activity came from arbitrage, though negative uses like oracle attacks and smart contract exploits were also noted.

📎 Source: https://www.bankofcanada.ca/2025/03/staff-discussion-paper-2025-6/