Canadian lawmakers publish recommendations in support of blockchain adoption News ▸ Canada ▸ Regulation
Canadian lawmakers publish recommendations in support of blockchain adoption
The Standing Committee on Industry and Technology has published a comprehensive report on blockchain technology that includes recommendations that attempt to balance regulations with innovation.
2 min read
Updated: Jun. 29, 2023 at 12:33 am UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
While the U.S. grapples with a fragmented and turbulent regulatory environment for digital assets, some of Canada’s lawmakers are attempting a more holistic approach.
The Canadian House of Commons’ Standing Committee on Industry and Technology has published a comprehensive report on blockchain technology, including a series of recommendations to the Government of Canada to support and foster the blockchain and cryptocurrency industry.
The Committee’s report, titled “Blockchain Technology: Cryptocurrencies and Beyond,” highlights the potential of blockchain technology to digitize unexplored sectors of the economy and trigger unprecedented value creation. In light of this potential, the committee’s first recommendation urges the government to acknowledge blockchain as an emerging industry with considerable economic and employment prospects.
The proposed guidelines recognize the need for a resilient regulatory framework, particularly in the wake of the FTX collapse that sparked global concern about the viability of the cryptocurrency industry. However, the committee believes that Canadian regulations are generally effective, citing the limited impact of the FTX debacle on Canadian firms:
“The regulatory environment is a primary reason why Canadian firms were less affected by recent events and why such events were significantly less likely to occur in Canada than elsewhere.”
To solidify Canada’s leadership in the digital assets arena, the committee suggests crafting a national blockchain strategy. This proposal includes a comprehensive review of consumer protection regulations and a pledge to protect individuals’ rights to self-custody digital assets.
Another key recommendation is for the government to adopt a distinct regulatory approach to stablecoins, a form of cryptocurrency designed to maintain a stable value relative to a specific asset or a pool of assets. The Committee views stablecoins as distinct from other cryptocurrencies due to their different use cases and unique regulatory challenges.
The recommendations also address the need for educational initiatives to inform the public about the risks and benefits associated with cryptocurrencies, as well as the establishment of a sandbox environment for entrepreneurs to test new technologies without regulatory hindrance.
The report emerges against a backdrop of lawsuits by the U.S. Securities and Exchange Commission (SEC) against global giants Binance and Coinbase for alleged violations of U.S. securities laws. These cases have led to significant volatility in the digital asset markets and sparked fear of a more extensive regulatory crackdown on digital assets in the United States.
As the U.S. enters a new era of regulatory scrutiny for digital assets, Canada’s comprehensive strategy outlines a progressive blueprint for fostering innovation while ensuring market integrity and consumer protection, positioning the country as a beacon of regulatory clarity in the turbulent world of digital assets.
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Jacob Oliver
Jacob Oliver is a recovering academic and English teacher turned crypto journalist and web3 writer. He holds a Ph.D. from the University of Washington.
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FTX
FTX is a defunct cryptocurrency exchange, currently in bankruptcy proceedings, that was founded by Sam Bankman-Fried and Zixiao “Gary” Wang in May 2019.