The Canadian Securities Administrators (CSA) has clarified
its stance on regulating stablecoins. This move aims to establish a balance
between investor protection and promoting innovation within the Canadian crypto
market, the regulator said.
In a statement published by the Ontario Securities
Commission (OSC), the CSA said it may permit continued trading of stablecoins
subject to its terms and conditions.
Stan Magidson, the CSA’s Chair and the CEO of the Alberta
Securities Commission, said: “The transparency of value-referenced crypto
assets about the composition and adequacy of their reserves and their
governance are critical issues that must be addressed to protect Canadian
investors and the integrity of our capital markets. 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.”
In February, the CSA stated that stablecoins, which are
digital assets designed to maintain a stable value over time, may fall under
the category of securities and/or derivatives. This announcement comes as the
CSA acknowledges the potential utility of such assets for clients using crypto asset trading platforms in Canada.
Besides that, the CSA introduced a set of interim terms and
conditions to ensure transparency and safeguard investor interests. One of the
measures states that the issuer of a stablecoin must
maintain an appropriate reserve of assets with a qualified custodian, held for
the benefit of crypto asset holders.
Additionally, the Canadian watchdog mandates the issuers of
the stablecoins and the crypto asset trading platforms to make governance,
operational, and asset reserve information publicly available.
Canada’s Regulatory Landscape for Crypto Assets
Canada maintains that crypto assets classified as securities
or derivatives traded on a crypto exchange are subject to securities
legislation. If a crypto exchange deals in contracts or instruments that are
derivatives based on crypto assets, the CSA requires that it be regulated as
securities. Additionally, the securities laws also apply for the Initial Coin Offering (ICO ).
The registered crypto entities are subject to specific
requirements encompassing risk management, disclosure, and the obligation to
deal honestly, fairly, and in good faith with clients.
Recently, the Canadian authorities adopted new business conduct
rules that align with international standards. Finance Magnates reported that
these rules, set to take effect on September 28, 2024, aim to improve
transparency, accountability, and ethical practices in the Canadian OTC
derivatives market.
The Canadian Securities Administrators (CSA) has clarified
its stance on regulating stablecoins. This move aims to establish a balance
between investor protection and promoting innovation within the Canadian crypto
market, the regulator said.
In a statement published by the Ontario Securities
Commission (OSC), the CSA said it may permit continued trading of stablecoins
subject to its terms and conditions.
Stan Magidson, the CSA’s Chair and the CEO of the Alberta
Securities Commission, said: “The transparency of value-referenced crypto
assets about the composition and adequacy of their reserves and their
governance are critical issues that must be addressed to protect Canadian
investors and the integrity of our capital markets. 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.”
In February, the CSA stated that stablecoins, which are
digital assets designed to maintain a stable value over time, may fall under
the category of securities and/or derivatives. This announcement comes as the
CSA acknowledges the potential utility of such assets for clients using crypto asset trading platforms in Canada.
Besides that, the CSA introduced a set of interim terms and
conditions to ensure transparency and safeguard investor interests. One of the
measures states that the issuer of a stablecoin must
maintain an appropriate reserve of assets with a qualified custodian, held for
the benefit of crypto asset holders.
Additionally, the Canadian watchdog mandates the issuers of
the stablecoins and the crypto asset trading platforms to make governance,
operational, and asset reserve information publicly available.
Canada’s Regulatory Landscape for Crypto Assets
Canada maintains that crypto assets classified as securities
or derivatives traded on a crypto exchange are subject to securities
legislation. If a crypto exchange deals in contracts or instruments that are
derivatives based on crypto assets, the CSA requires that it be regulated as
securities. Additionally, the securities laws also apply for the Initial Coin Offering (ICO ).
The registered crypto entities are subject to specific
requirements encompassing risk management, disclosure, and the obligation to
deal honestly, fairly, and in good faith with clients.
Recently, the Canadian authorities adopted new business conduct
rules that align with international standards. Finance Magnates reported that
these rules, set to take effect on September 28, 2024, aim to improve
transparency, accountability, and ethical practices in the Canadian OTC
derivatives market.
