Canada Faces Economic Threat Without Crypto Regulation, Coinbase Says

• Canada faces a critical need for regulatory reform in the crypto space to clarify definitions of digital assets.
• Coinbase proposes urgent action from the next government, including establishing a task force within 100 days.

Canada is eyeing its upcoming federal election, as many point to the country’s stand on cryptocurrency and the future role of the digital economy. With digital assets gaining traction around the world, Canada is at risk of losing its lead without clear regulatory approaches. Coinbase’s Canadian country director, Lucas Matheson, has warned that while Canada has been a leader in the crypto space, it must act decisively to stay ahead.

However, Lucas noted that approximately five million Canadians own digital assets. A recent survey found that 86% of citizens would benefit from modernization, while 80% believe the current financial system is unfair, and 76% feel it is outdated. Additionally, one-third of Canadians indicated they would participate in cryptocurrency if clear regulations were in place.

Canada’s Shifting Crypto Regulation

Coinbase has been working with Canadian regulators to form a balanced approach that protects the community. Recent company registration as a restricted dealer by the Canadian Securities Administrators has marked a step forward.  Despite this, there is a perception that more changes are required to fully reveal Canada’s abilities in the digital asset space.

Clear definitions of digital assets are also important to promote understanding and confidence among Canadians. It is essential that regulators categorize various digital assets, such as meme tokens, utility tokens, and NFTs, in a way that helps Canadians understand their decisions and makes the market more accessible.

In addition to this sentiment, as we noted in our last report, Canada’s regulation is at a crossroads following  Mark Carney, the newly elected Canadian prime minister, criticism of Bitcoin. In a speech, Carney argued that Bitcoin’s fixed supply posed a threat to the economy, describing it as a “virtual global gold standard” and a “criminal act of monetary amnesia.” 

Proposals for the Next Federal Government

Coinbase is urging the next government that will take the office to prioritize a clear crypto space. It is proposed that within the first 100 days, the government should establish a task force for crypto strategy.Another key proposal is the creation of Bitcoin reserve, similar to other countries. By creating a strategic reserve linked to Bitcoin, Canada is set to act as an hedge against financial risks.

Alongside this, it is proposed that stablecoins the digital currencies tied to the value of real-world assets should be regulated as payment instruments rather than securities. Clear definitions of digital assets are also necessary to promote understanding and confidence among Canadians. It is essential that regulators categorize various digital assets, such as meme tokens, utility tokens, and NFTs, in a way that helps Canadians understand their options and makes the market more accessible.

Another aspect is that the energy resources can fund Canada to become a leader in the cryptocurrency mining industry, but for this to happen, fair regulatory policies must be adopted. Removing obstacles and applicable taxes for mining cryptocurrency operations will boost the development of this industry and can eventually promote employment and the improvement of technologies.