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A Canadian House committee released a report on Wednesday outlining 16 recommendations for how the government should regulate the blockchain sector – and the outlook is notably optimistic.
Crypto exchange Coinbase commended the report, stating it was “encouraged by the progressive stance of the parliamentary committee.”
Opening Canada to Crypto
In its initial recommendation, The Parliamentary Standing Committee on Industry and Technology (INDU) urged the Canadian government to acknowledge blockchain as an emerging industry with the capacity to generate employment and stimulate economic development.
The committee’s stance aligns with that of British Prime Minister Rishi Sunak, who led the passage of a new bill recognizing crypto transactions as legitimate, regulated financial activities.
Canada’s Prime Minister Justin Trudeau has generally shown skepticism towards crypto, while his conservative political opponent Pierre Poilievre openly supports Bitcoin.
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The House committee’s makeup leans slightly left, yet it reflects Poilievre’s viewpoint in certain respects. Concerning the Bitcoin mining sector, the report recommends adopting a “neutral and equitable stance” to “encourage a competitive digital asset mining landscape” and “draw in investments.”
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It proposed examining “equity among provinces” in the application of the Excise Tax Act to the mining sector to “ensure fair taxation.” In the United States, the Biden Administration suggested a burdensome 30% excise tax specifically aimed at miners in May (which has been temporarily set aside).
Canadian legislators also supported safeguarding individuals’ “right to self custody” and facilitating access to “safe and reliable on and off ramps.”
Coinbase Responds
The report from Canada was refreshing for Coinbase, which has often criticized the absence of regulatory clarity and the adversarial stance from the United States, where it is based.
In a response letter, the company expressed particular appreciation for the committee’s stablecoin recommendation, advocating for a “distinct regulatory approach” to these assets.
“Stablecoins, a form of cryptocurrency linked to a stable asset like fiat currency, introduce unique regulatory challenges,” stated Coinbase. “This customized approach will allow for effective oversight while fostering innovation.”
Canada currently classifies stablecoins as securities – a view not shared by Coinbase CEO Brian Armstrong. The U.S. Securities and Exchange Commission (SEC) also seems to regard them as securities, as evidenced by its recent lawsuit against Binance, claiming that its stablecoin BUSD qualifies as such.
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