Stablecoin issuer Circle, whose flagship product USDC has a current market capitalization of roughly $40 billion, issued a formal undertaking on Wednesday to Canadian securities regulators committing to comply with the country’s updated rules on stablecoin regulation.
Canadian regulators issued updated interim guidance for exchanges (crypto asset trading platforms or CTPs) and stablecoins (fiat-backed crypto assets or FBCAs) in October 2023, to bolster investor protection.
Key aspects of the guidance include ensuring stablecoins and similar assets remain on a one-to-one ratio with the Canadian or U.S. dollar, and that reserve requirements that back such assets are denominated in cash, short-term government debt, or qualified money market securities.
Other rules include requirements to use a qualified custodian, specific reporting obligations, and full disclosure of any risks that may impact clients.
“Circle becomes the first stablecoin issuer to comply with the new listing and markets rules for the Canadian crypto market,” said Circle CEO Jeremy Allaire in a post on X. “USDC is the first and only major dollar stablecoin that is compliant with new regulations in Canada,” he added.
The firm published a press release on its website announcing its commitment to Canadian regulatory compliance and outlining potential benefits of USDC to the country. The release states:
A regulated market for global stablecoins…has the potential to bring significant efficiency gains to Canadian cross-border, retail, and institutional settlement systems. This includes cheaper settlement of payment transactions, increased consumer protections, reduced settlement risk, and increased payments competition.