Canada's New Cryptocurrency Regulation: The Path to Transparency

2nd of August, 2023

Planned changes 

Canada is a leader in developing regulation of cryptocurrencies and blockchain technology. Canadian regulators recently published new rules affecting local banks and insurance companies involved in cryptoassets. As part of the process, an open consultation is now underway to allow all interested parties to express their views until September 20, 2023.

A framework of international standards 

The Basel Committee's initiatives have served as a foundation for Canadian regulators. They are using their insights to develop capital proposals for crypto-asset institutions to assess how ready the traditional financial system is to adopt blockchain technology.

Clarity for organizations

Capital and liquidity in relation to crypto-assets are key risks for deposit-taking organizations and insurance companies. Peter Routledge, managing director of the financial regulator, emphasizes that the new guidelines are designed to provide clarity and compliance with international standards.

Two approaches 

Canada offers two approaches to regulation - simplified and comprehensive. Depending on the degree of interconnectedness with cryptoassets, organizations will be able to choose the approach that better suits their needs. The regulator's guidance will detail the classifications of digital currencies and how capital is handled.

The guidance also includes relevant parts of the BCBS (Basel Committee on Banking Supervision - Principles for Effective Risk Aggregation and Risk Reporting) standard, taking into account the specifics of the industry.

Control over cryptocurrencies 

International standard setters recommend considering cryptocurrency as the most risky asset for banks. The European Union has already taken steps to legislate such changes. Limits on the amount of bitcoins (BTC) and ether (ETH) to hold will become common practice.

How to secure crypto activity?

The free movement of cryptocurrency will soon end as regulators seek to control crypto activity. Enterprising companies are already starting to keep records and collect all the necessary documents to protect themselves and prevent risks. 

Intelligent Solution Group specialists help them in this. We provide professional advice and assistance to ensure that your business complies with regulatory requirements and international standards.

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