The focus of the Canadian Securities Administrators (CSA) is currently on the regulation and understanding of distributed ledger technology (DLT) and its related components. The agency has even incorporated a section on DLT and cryptocurrencies in its business plan for 2019-2022 which was approved on 28th May and represents a collaborative effort by the CSA to outline its priorities over the next few years.
The CSA stated some priorities which include reduction of risks, regulatory advancement, and fair and efficient markets. But most importantly, the agency made mention of the need to put the implications of DLT into consideration including blockchain technology.
Also, the CSA revealed that it became interested in DLT after it discovered its ability to change the financial industry. The agency further revealed that it is prepared to enact each of the changes required to adapt to the existing regulatory framework so as to use it to solve crypto- related problems that may occur.
The press release states that:
“This strategic goal consists of (i) identifying the emerging regulatory issues related to technology that require regulatory action or clarity, and (ii) developing a tailored and effective regulatory response for significant issues identified.”
Furthermore, the CSA is considering taking custodial requirements in relation to crypto assets, as well as capital raising issues that may be unique to blockchain-based securities.
Meanwhile, as from 1st of June, 2020, it will be compulsory for digital currency exchanges in Canada to register with the
Financial Transactions and Reports Analysis Centre of Canada. This new development will be put into place next year along with other amendments made to the new Anti-money Laundering Laws in the country.
Lori Stein, a partner at business law firm Osler, Hoskin & Harcourt said that:
“The hope is that now that there is going to be a requirement to register and comply, and oversight by FinTRAC, that banks and other financial entities are going to be more open to providing services to and dealing with virtual-currency businesses.”