The Canadian Securities Administrators (CSA) has clarified
its stance on regulating stablecoins. This move aims to strike a balance
between investor protection and fostering 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, 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 in Canada of
crypto asset trading platforms.
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 value-referenced crypto asset 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 issuer 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
