Stablecoin trading and issuance requirements have been established by the umbrella group for Canadian securities regulators.
With a focus on stablecoins, the Canadian Securities Administrators (CSA) has offered guidelines to exchanges and cryptocurrency issuers on its interim approach to what it refers to as value-referenced crypto assets.
Various cryptocurrencies that reference the value of a single fiat currency may be traded, subject to specific restrictions and limitations, according to a clarification published on October 5 by the umbrella body of Canada’s provincial and territory securities authorities.
The CSA reiterated in February that stablecoins “may constitute securities and/or derivatives,” which Canadian cryptocurrency exchanges are not allowed to trade.
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But if issuers have a sufficient reserve of assets with a licensed custodian and stablecoin-offering crypto exchanges make “certain information related to governance, operations, and reserve of assets publicly available,” the CSA might permit trading in those assets.
Stan Magidson, CEO of the Alberta Securities Commission and Chair of the CSA, issued the following statement:
“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 issued a warning, stating that even fiat-backed crypto assets that meet the requirements are dangerous and should not be seen as endorsed or risk-free.
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It was reported in August that regulatory certainty in Canada has increased institutional interest in cryptocurrencies.
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The CSA provided instructions on staking in July, indicating that it was permitted but that there were few lending opportunities and that the percentage of “illiquid” assets must not exceed a certain level.
Over the past 18 months or so, stablecoin market capitalization has decreased and is now at $123 billion, or around 11% of the global crypto market cap.
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