Canada is poised to make significant strides in adopting blockchain technology, as a prominent group of lawmakers has urged the government to formulate a national blockchain strategy. Similar to the United States, Canada currently lacks clear regulations in the crypto and blockchain market, placing the country at a disadvantage. While various regions worldwide are actively striving to become cryptocurrency hubs and embrace emerging financial technologies, they are enacting laws and regulations that are favorable to the crypto industry and companies involved in crypto-related activities.
Contrastingly, Western nations remain hesitant to take similar measures, resulting in local businesses relocating and emerging enterprises refraining from considering Western countries as viable options. While the US Securities and Exchange Commission (SEC) shows no signs of changing its crypto policies in the near future, Canadian lawmakers have begun demanding action from their government.
The initial recommendation for this call to action was outlined in a report issued by the local House of Commons Standing Committee on Industry and Technology. The House urged the government to acknowledge blockchain technology as an emerging industry in Canada, emphasizing the substantial long-term economic and job creation prospects it presents. The report included a total of 16 recommendations, with a focus on encouraging the government to explore opportunities for international collaboration in establishing blockchain regulations and policies, including involvement from major trading partners.
The committee highlighted that it conducted a comprehensive study on Canada and blockchain technology, which encompassed a series of five meetings. Throughout the study, the committee engaged with 31 witnesses and received six briefs. Witnesses consistently emphasized the robust regulatory safeguards in place in Canada, including provincial securities regulation and federal Anti-Money Laundering (AML) and anti-terrorism financing obligations.
Furthermore, witnesses stressed the importance of the government collaborating with the blockchain industry to gain a comprehensive understanding of the rapidly evolving sector. Only through this collaborative effort would the government be able to enact regulations that effectively protect consumers without stifling innovation. This balance is crucial for harnessing the full potential of blockchain technology for the benefit of the country and its citizens.
The crypto and blockchain industries continue to evolve and innovate at a rapid pace, with each passing year introducing new trends, products, and services. Blockchain technology also continuously finds ways to enter new industries and introduce enhancements. Thus far, Canada’s approach to regulating digital assets has been notably stringent. In fact, it is expected that regulations surrounding crypto exchanges will become even stricter, particularly following the collapse of FTX exchange and several related businesses last year.
Canada’s regulatory approach has garnered praise from Coinbase, a prominent cryptocurrency exchange, as the nation’s supervision of the sector aligns with Coinbase’s own principles. However, Coinbase has found itself entangled in a legal battle with US regulators. The current situation highlights the need for regulatory clarity and balance in the crypto market, which Canadian lawmakers are actively advocating for.
Canada is poised to make significant progress in blockchain adoption as lawmakers urge the government to develop a national blockchain strategy. By recognizing the potential economic benefits and job creation opportunities, and by collaborating with the blockchain industry, Canada can establish effective regulations that safeguard consumers while fostering innovation. With the global race to become crypto hubs, Canada has the opportunity to position itself as a leader in the emerging field of blockchain technology.