CSA Issues Interim Guidelines on Stablecoins Trading in Canada
Summary:
The Canadian Securities Administrators (CSA) have issued guidance on its interim approach to value-referenced crypto assets, with a focus on stablecoins. The CSA may allow trading of certain cryptocurrencies linked to the value of a single fiat currency, providing issuers maintain an appropriate reserve of assets with a qualified custodian, and crypto exchanges offering stablecoins publicly share information on operations, governance, and asset reserves. The CSA stresses such assets are not risk-free or endorsed, even if they satisfy the terms. The move aims to ensure investors are adequately informed about potential risks.
The top regulatory body for securities in Canada, the Canadian Securities Administrators (CSA), has issued advice for exchanges and issuers of cryptocurrency on its provisional stance towards what it terms as value-linked crypto assets, particularly stablecoins. The CSA, a consortium of territorial and provincial security regulators across Canada, stated on October 5 that it could greenlight the trading of specific cryptocurrencies that correlate to the value of a singular fiat currency, given certain conditions are met. In a previous affirmation made in February, the CSA asserted that stablecoins may be deemed securities and/or derivatives, thus making it illegal for Canadian crypto exchanges to trade such assets. Notwithstanding this restriction, the CSA may permit trading of these assets if issuers establish an adequate reserve of assets managed by a certified custodian, and crypto exchanges involved in the offer of stablecoins make certain governance, operations, and asset reserves-related data public. In a statement, CSA Chair, and CEO of the Alberta Securities Commission, Stan Magidson, said: "This preliminary framework will form the basis for future improvements and will set standards to ensure that investors acquire the necessary knowledge about the assets they are buying, including associated risks." However, the CSA warned potential investors that crypto assets linked to fiat currencies, even those fulfilling the set conditions, carry risks and are not risk-free or endorsed. In related news, despite a decline in crypto ownership in Canada due to stringent regulations and price falls, Cointelegraph uncovered in an August report that increased regulatory clarity had sparked heightened institutional interest in crypto. In July, the CSA issued a policy statement on staking, stating that while it is allowed, lending opportunities are severely limited and holdings of "illiquid" assets must be regulated. The market capitalization of stablecoins has seen a downward trend over the last year and a half, currently standing at $123 billion, constituting about 11% of the complete crypto market cap.
Published At
10/6/2023 6:21:40 AM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.