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- In August, there was a rise in institutional interest in cryptocurrency within Canada, according to reports.
- The CSA introduced regulations concerning staking earlier in July.
Focusing on stablecoins, the Canadian Securities Administrators (CSA) has provided guidance to exchanges and cryptocurrency issuers regarding its initial stance on what it terms value-referenced crypto assets.
On October 5, Canadian provincial and territorial securities authorities clarified the potential trading of cryptocurrencies that are pegged to a single fiat currency. The Canadian Securities Administrators (CSA) indicated in February that stablecoins “may constitute securities and/or derivatives,” which renders them illegal for trading on Canadian cryptocurrency exchanges.
Establishing Standards
The CSA might allow stablecoin trading if issuers maintain adequate reserves of assets with an authorized custodian and if stablecoin offering cryptocurrency exchanges disclose “certain information related to governance, operations, and reserve of assets publicly available.”
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Stan Magidson, CSA Chair and Chair and CEO of the Alberta Securities Commission remarked:
“This interim framework, which we will build upon in the future, sets certain standards to help ensure that investors receive the information they need about the assets they are purchasing, including the risks associated with them.”
The CSA cautioned that even crypto assets backed by fiat currency that fulfill the criteria remain highly volatile. In August, it was reported that institutional interest in cryptocurrency has risen in Canada, attributed to the country’s more streamlined legal framework.
The CSA announced staking regulations in July, noting that while the practice is legal, there are limitations on lending and the proportion of “illiquid” assets that may be held.
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