Canada postpones regulations for cryptocurrencies and blockchain till 2019
Keeping in view the elections in 2019, the Canadian government has postponed the release of its final regulations for cryptocurrency and blockchain companies. The final published regulations were expected to be out this fall, but now the government has postponed it well until late 2019.
Considering the elections in 2019, the government is already in the pre-election mode and the final cryptocurrency regulations have effectively been put on hold leaving the current regulatory regime in place well into 2020, as there needs to be an addition 12-month period after publication for any regulation to take effect.
This is being seen as a positive move by many who see it as a backward step by the government which had proposed stricter regulations in the draft version published earlier in June 2018. There are also others who believe that this delay might harm their competitive advantage in the crypto market, where countries like Switzerland and Malta are taking the lead and acting as breeding grounds for crypto trading with fewer regulations and a favorable tax regime.
In an interview to the Bitcoin magazine, the Blockchain Association of Canada (BAC) said that it appreciates that the government is proceeding with caution, in recognition of the complexities of this new evolving sector.
“The decision to delay the proposed regulations bodes well for the Canadian blockchain and cryptocurrency space. The government is committed to an innovation agenda and sometimes … it may be best to observe and intervene as little as possible,” said BAC Executive Director Kyle Kemper.
It seems that the comments and recommendations from the industry to the proposed regulatory package seems to have contributed to the government’s decision to postpone the publishing of the regulations until next year.
BRI in favour of a Central Regulatory Board
One set of comments submitted to the federal finance department included a report from the influential Toronto-based Blockchain Research Institute (BRI).
The report says there’s substantive regulatory work that needs to be done to create certainty and build a competitive industry, although the participants called for a middle ground, saying:
“… as the blockchain revolution unfolds, regulators would be wise to avoid the chainsaw when microsurgery could do. To be sure, we do not want the Wild West.”
The BRI report speaks strongly about the formation of a central regulatory board like the U.S. Securities and Exchange Commission (SEC) and points out that Canada is the only developed federal democracy that does not have a securities regulatory authority in place.
Uncertainty in the blockchain market continues…
Coinsquare Exchange CEO Cole Diamond, as a member of the BRI’s Advisory Committee, made the case for more regulatory clarity.
“I don’t think that delaying regulatory clarity is a good thing. At the same time, I understand how complex this market is. The regulators are still learning, and I can assure everyone that they are trying.My hat goes off to the OSC Launchpad, the Ministry of Finance and others for their focus on the market. We look forward to continuing to work with them to bring about opportunities for Canadian businesses to lead globally in this exciting space.”
Image via Shutterstock
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