According to Cointelegraph, the Canadian Securities Administrators (CSA) has offered guidance to exchanges and cryptocurrency issuers on its interim approach to value-referenced crypto assets, focusing on stablecoins. On October 5, the organization, which represents Canada's provincial and territorial securities regulators, published a clarification stating that it may permit trading of specific cryptocurrencies that reference the value of a single fiat currency, subject to terms and conditions.
In February, the CSA reiterated its stance that stablecoins may be considered securities and/or derivatives, which Canadian crypto exchanges are not allowed to trade. However, if issuers maintain an appropriate reserve of assets with a qualified custodian and crypto exchanges offering stablecoins make certain information related to governance, operations, and reserve of assets publicly available, the CSA may allow those assets to be traded.
CSA Chair and CEO of the Alberta Securities Commission, Stan Magidson, stated that the interim framework sets certain standards to help ensure that investors receive the information they need about the assets they are purchasing, including the risks associated with them. The CSA also warned that fiat-backed crypto assets meeting the terms are still risky and should not be viewed as endorsed or risk-free. In August, Cointelegraph reported that regulatory clarity in Canada has generated increased interest in crypto from institutions. In July, the CSA issued guidance on staking, stating that it was allowed but lending opportunities are limited and the proportion of illiquid assets is restricted. The stablecoin market capitalization has been declining over the past 18 months and is currently at $123 billion, representing around 11% of the total crypto market cap.
