The Canadian Securities Administrators (CSA) Guides Exchanges and Issuers on Value-Referenced Crypto Assets, Emphasizing Stablecoins.
The Canadian Securities Administrators (CSA) has provided exchanges and cryptocurrency issuers with guidance on its interim approach to what it refers to as value-referenced crypto assets, with a focus on stablecoins.
The umbrella organization of Canada’s provincial and territorial securities regulators published a clarification on October 5 stating that, subject to certain conditions, it may permit trading of specific cryptocurrencies that reference the value of a single fiat currency.
In February, the CSA reaffirmed that stablecoins “may constitute securities and/or derivatives,” which are prohibited from trading on Canadian crypto exchanges.
However, if issuers maintain an appropriate reserve of assets with a qualified custodian and crypto exchanges offering stablecoins, make “certain information related to governance, operations, and reserve of assets publicly available.” The CSA could allow those assets to be traded.
Stan Magidson, Chair of the CSA and Chair and CEO of the Alberta Securities Commission issued the following statement:
“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.”
The CSA cautioned that fiat-backed crypto assets that satisfy the terms are still hazardous and should not be considered endorsed or risk-free.
The CSA issued guidance on staking in July, stating that it was permitted but that lending opportunities are limited and the proportion of “illiquid” assets is constrained.
The market capitalization of stablecoins has decreased over the past 18 months and is around 11% of the total crypto market cap at $123 billion.
