- The demand for cryptocurrency regulations is continuously growing
- Regulators are still uncertain of their next move despite the clamour for cryptocurrency regulations
- Many cryptocurrency companies are starting to leave Canada
Countries around the globe are struggling to regulate crypto, and are choosing a wide variety of courses. Countries like Japan and Hong Kong are eager to welcome the promising cryptocurrency companies and those projects that are after regulatory certainty. As a result, regulators elsewhere are getting pressured by a growing demand for clearer regulation of virtual currencies.
How Canadian regulatory authorities are handling the challenge
Despite the clamour, regulators are still unsure of their next move. This is because balancing the demand of giving investors and consumers protection whilst imposing regulations that do not suppress innovation can be a daunting task. The same regulatory dilemma is what’s been binding Canada as the country carves out its strategy. According to the deputy governor of the Bank of Canada, Timothy Lane, Canada’s regulatory framework which governs virtual assets is still a work in progress.
In a statement by Blair Wiley, the general counsel and head of regulatory affairs at Wealthsimple, he said:
“There are still challenges for innovators, for startups where they can’t go to one point of contact and get clear, concise and definitive feedback on a financial services product that might have elements of banking, insurance, investments, all rolled into one.”
A Toronto-based tech lawyer, Addison Cameron-Huff, also concurred on the issue. According to the lawyer:
“The problem is that people are not sure what they are allowed to do. Clear answers are hard to come by.”
Canada is losing crypto companies to countries with clearer, friendlier regulators
Although the regulatory authorities are having a good progress in ironing out the kinks, Canada may be losing out. There are news that many cryptocurrency companies are starting to leave Canada to look for countries with friendlier regulations.
There are a lot of provincial and federal authorities sharing their thoughts on the matter. Regulators need to consider them and oversee a ton of laws and regulations, making it harder for them to know what their next steps should be with cryptocurrencies.
Moreover, there are Canadian securities regulators who have issued additional guidance in line with the approach by regulators from other countries. In fact, the Ontario Securities Commission (OSC) warned about ICOs triggering certain Ontario securities law requirements. The Canadian Securities Administrators also gave two notices.
According to Toronto lawyer and blockchain expert Amy ter Haar, it’s time to have a coordinated international regulatory framework which can deal with digital assets:
“There are various regulatory ecosystems for these types of securities that need to be mapped out, and then the regulators need to work together and regulate because it is an increasingly interconnected world. The solution can come through a contextual approach to principle-based regulations.”