Canada’s Crypto Firms Get More Time to Comply with Stablecoin Rules
The Canadian Securities Administrators (CSA) has updated
stablecoin regulations for crypto asset trading platforms. The CSA has also extended the compliance deadline for registered
firms to meet new conditions or propose alternatives to protect investors.
CSA Extends Stablecoin Compliance Deadline
Despite global efforts to develop payment-based and
banking-based regulatory frameworks for stablecoins, Canada lacks a structured
regulatory regime for the asset class. However, the CSA expressed its commitment to protecting Canadian investors from the risks posed by trading these assets.
The administrators have now extended its previous deadline of
October 31, 2024, to December 31, 2024, reportedly due to technical challenges
faced by CTPs. This gives the platforms additional time to either comply with the
required terms or propose alternative measures to safeguard investors.
CSA provides update to crypto asset trading platforms about value-referenced crypto assets: https://t.co/YYXkfF8Dbd pic.twitter.com/MM2Fr5nAP6
— CSA_News (@CSA_News) September 26, 2024
“The CSA has actively engaged with CTPs and crypto
industry participants and remains open to proposals for alternative ways to
address investor protection concerns raised by VRCAs,” the regulator wrote.
“To that end, the CSA is further extending the October
31 deadline to December 31, 2024. The extension is intended to provide more
time for CTPs to either comply with the terms and conditions of their
registration and exemptive relief decisions or to propose alternatives that
address investor protection concerns,” the regulator explained.
A recent notice by the CSA set out the conditions for
trading fiat-backed cryptocurrencies to mitigate investor risks. By December
29, 2023, CTPs were instructed to halt trading of any stablecoin other than
those backed by a single fiat currency. Despite this, the CSA warned that holding value-referenced crypto assets on Canadian platforms still doesn’t provide the same protections as regulated deposits.
Regulatory Uncertainty Remains
Although several international jurisdictions are
working on regulatory frameworks for stablecoins, Canada remains in limbo
regarding a concrete structure for these assets. The CSA’s recent actions
highlighted the uncertainty and caution surrounding the trading of unregulated or
partially regulated cryptocurrencies in Canada.
The CSA advised investors to stay informed about the
risks of crypto assets, which, unlike traditional fiat currencies like the
Canadian or US dollar, can be highly volatile. The regulator has provided
more details and educational resources on its investor tools crypto assets page
as it continues to coordinate regulations across Canada’s capital markets.
The CSA’s approach highlights the growing regulatory
scrutiny faced by crypto platforms in Canada as the regulator balances
promoting innovation and protecting investors.
This article was written by Jared Kirui at www.financemagnates.com.