Today we have the opportunity to speak with Ilana Kelemen, Senior Strategic Advisor, Communications and Stakeholder Relations at the Canadian Securities Administrators. We’ll cover crucial topics for crypto, such as regulatory goals for Crypto Asset Trading Platforms (NCPs), terminology around “Value-Referenced Crypto Assets” (VRA), and much more.
What are your goals and expectations for crypto regulation in Canada?
We aim to register Cryptoasset Trading Platforms (NCPs) that have signed a Pre-Listing Undertaking (PPI) and are able to comply with regulatory obligations. To the extent that these platforms engage in transactions in securities or derivatives, we expect them to comply with applicable securities laws, which we will continue to adapt as necessary.
Why did the CSA opt for the term “Value-Referenced Crypto Assets” (VRA) rather than “stablecoin”?
According to Staff Notice 21-332 of CSA, we chose the term “Value-Referenced Crypto Assets” because the term “stablecoin” can be misleading by suggesting an intrinsic stability of the asset. As with other cryptoassets, these can be volatile. There have been several cases where supposedly stable assets have failed to maintain their value on trading platforms.
Why won’t algorithmic ACRVs be allowed in Canada?
It is important to note that the CSA has not yet authorized or approved cryptoassets pegged to value. PNCs who are registered or who have signed an EPI have agreed not to trade in such assets without the prior written consent of the CSA. The CSA considers that crypto assets pegged to a value, whose stability depends on an algorithm integrated into a smart contract rather than a reserve of assets, generally present higher risks. These assets are unsecured and rely on algorithms and market incentives to maintain their value, which may increase the level of risk for investors.
How do the CSA plan to monitor ACRV reserves and ensure transparency of these controls?
The CSA is working to establish criteria to manage the risks associated with ACRVs and their reserves, including risks related to the repurchase of assets.
How does the new joint platform of WonderFi, Coinsquare and CoinSmart position itself with respect to Canadian regulations?
It is logical that players in the Canadian market are seeking to consolidate. This new entity will have to comply with all securities regulations, as well as OCRI guidelines.
What is your opinion on the recent actions of US regulators towards crypto companies, and how might this influence regulation in Canada?
We are aware of international developments, but each country has its own legal and regulatory framework. The actions of other regulators are considered in our decision-making process regarding the registration of cabin crew in Canada.
And that’s the end of our interview on the regulation of cryptos in Canada. We covered important topics like the criteria for PNC registration, the specific terminology used by the CSA, and how Canada plans to manage risk and transparency in this growing area. Many thanks to our guest for sharing his valuable knowledge and perspectives.
At the time of this interview, Ilana Kelemen held the following position: Senior Strategic Advisor, Communications and Stakeholder Relations for the Canadian Securities Administrators.
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