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Canadian Lawmakers Rally Behind Crypto and Push for Innovative Stablecoin Regulation

Jun 30, 2023

Canadian Lawmakers Champion Blockchain and Propose Innovative Regulatory Approach to Stablecoins

Canadian lawmakers have published a groundbreaking report that defends and supports the crypto industry, calling for the recognition of blockchain as a growing sector with the potential to drive job creation and economic growth. The report, which includes 16 recommendations, has garnered praise from industry participants, including leading cryptocurrency exchange Coinbase.


The Parliamentary Standing Committee on Industry and Technology (INDU) emphasised the importance of recognising individuals' right to self-custody and distinguishing stablecoins from other cryptocurrencies. The committee's recommendations align with the progressive approach taken by British Prime Minister Rishi Sunak, who recently championed a bill to legitimise and regulate crypto transactions. While Canadian Prime Minister Justin Trudeau has been somewhat dismissive of crypto, his conservative rival Pierre Poilievre has shown a pro-Bitcoin stance. The composition of the House committee leans slightly left but is more aligned with Poilievre's position.


Regarding the Bitcoin mining industry, the report suggests maintaining a neutral and equitable position to foster a competitive digital asset mining environment and attract investments. It also proposes investigating equity between provinces in terms of the Excise Tax Act's application to the mining industry to ensure fair taxation. This stands in contrast to the United States, where the Biden Administration recommended a 30% excise tax targeting miners, albeit currently set aside.


Coinbase, a company that has been critical of regulatory uncertainty and hostility in the United States, welcomed the Canadian report and expressed particular support for its stablecoin recommendations. Coinbase advocated for a unique regulatory approach to stablecoins, recognising their distinct nature as cryptocurrencies pegged to stable assets like fiat currency. The company believes that tailored regulation will ensure effective oversight while promoting innovation.


Canada currently considers stablecoins as securities, a position that differs from that of Coinbase CEO Brian Armstrong. The U.S. Securities and Exchange Commission (SEC) also seems to lean towards classifying stablecoins as securities, as evidenced by its recent lawsuit against Binance and its stablecoin BUSD. Coinbase's positive response to the Canadian report reflects its appreciation for the regulatory clarity and innovative mindset demonstrated by Canadian lawmakers.


The report from the Canadian House of Commons Parliamentary Standing Committee on Industry and Technology is a significant step towards establishing Canada as a leader in the crypto and blockchain space. It recognises blockchain as an emerging industry with tremendous economic potential and emphasises the importance of consumer protection and regulatory clarity. The committee recommends the establishment of a national blockchain strategy, highlighting the federal government's crucial role in fostering innovation, supporting industry growth, and ensuring regulatory coherence across the country.


The committee's innovative regulatory approach to stablecoins sets the stage for effective oversight while encouraging the development of this unique type of cryptocurrency. With more than 16 comprehensive recommendations, the report provides invaluable insights for creating a forward-thinking regulatory framework for the crypto and blockchain industry in Canada.


"These strong recommendations pave the way for Canada to become a leader in the cryptoeconomy," industry experts commented. "By recognising blockchain as an emerging industry, prioritising consumer protection, establishing a national strategy, and adopting a distinct regulatory approach to stablecoins, Canada can attract investments, foster innovation, and create a thriving ecosystem for blockchain-related businesses and startups."


Canada's commitment to embracing the potential of blockchain technology and cryptocurrencies positions the nation as a trailblazer in the global race to harness the power of the digital economy. The recommendations outlined in the committee's report provide a roadmap for propelling Canada forward as a leader in the ever-evolving landscape of crypto and blockchain.


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