Canada’s securities regulator has included plans for distributed ledger technology and cryptocurrencies in its priorities for 2019-22, setting the trajectory for a further embrace of the blockchain and cryptocurrency sectors.
The Canadian Securities Administrators (CSA) had their business plan approved on May 28, which includes a focus on developing understanding of blockchain as well as the approach to regulation.
In the report, the CSA said crypto assets were the highest-profile application of blockchain technology, introducing their own regulator challenges. It noted, “Crypto-assets are probably the most well-known and widespread application of blockchain. The CSA will consider possible changes to adapt the current regulatory framework to address the unique challenges brought by crypto-assets that fall under the CSA jurisdiction.”
The regulator said it considered blockchain to be a transformative technology for the financial sector in particular, which it said could require a tailored response in terms of new legislation.
“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,” according to the CSA business plan.
Setting out its priorities, the CSA said its work would include a focus on reducing risks, making markets more efficient and developing regulatory policy.
The CSA is also reported to be considering imposing custodial compliance standards for cryptocurrencies and other digital assets, as well as the regulation of blockchain-based securities.
The report means that while the regulator will be increasingly investigating blockchain technology, the industry may have to wait for the inevitable regulatory response.
It comes against a backdrop of tightening regulation for the crypto sector in Canada, with amendments to anti-money laundering legislation requiring cryptocurrency exchanges to register with the Financial Transactions and Reports Analysis Centre of Canada from June 2020.
The measures were in part designed to increase the provision of banking services to the crypto sector, with mainstream Canadian banks traditionally reluctant to serve the sector.
With the CSA now likely to be considering recommendations for regulation within its jurisdiction, it looks like the law will continue to become more restrictive in the months ahead.
New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.