Canada is approaching a pivotal federal election, and the future of its crypto industry hangs in the balance.
In light of this, Coinbase is sounding the alarm that unless Canada swiftly implements clear, innovation-friendly regulations, it risks falling behind its international counterparts.
The exchange’s Canadian country director, Lucas Matheson, emphasized in a blog post that while Canada has been a leader in the crypto space, the lack of proactive policymaking presents a danger.
Crypto is Growing In the Hands of Retail in Canada
A growing number of Canadians are already engaged with crypto. According to Coinbase, an estimated five million Canadians hold digital assets, and public sentiment strongly favors financial reform.
Furthermore, 86% of Canadians believe their financial system needs modernization, with many perceiving it as unfair (80%) and out of touch (76%).
If the cryptocurrency industry were more regulated, nearly a third (29%) would be more inclined to invest in it.
In fact, a report from MoonPay shows that over 90% of its Canadian customers choose to buy crypto.
Source: MoonPay
These numbers highlight a pressing need for the next federal government to embrace regulatory changes that foster financial innovation.
However, regulatory roadblocks have already driven several major exchanges out of Canada, particularly due to stringent policies on stablecoins and trading platforms.
The looming election presents a rare opportunity for a new administration to implement reforms that support crypto adoption and position Canada as a leader in the global digital asset economy.
Coinbase’s Call for Regulatory Reform
Coinbase has laid out a detailed proposal urging the incoming government to take decisive action within the first 100 days of its tenure.
The company’s recommendations include establishing a government crypto task force.
This group would bring together industry leaders from the public and private sectors alongside academic experts to create a national crypto strategy and a coherent regulatory framework.
Another key recommendation is the creation of a Bitcoin reserve. With countries like the United States exploring strategic Bitcoin reserves, Coinbase encourages Canada to follow suit.
Another crucial point concerns regulatory clarity on stablecoins. Coinbase argues that stablecoins have the potential to revolutionize payment infrastructure by enabling faster, cheaper, and more efficient transactions.
The company also stresses the importance of clearly defining digital assets. The lack of standardized classification is a major challenge in Canada’s crypto adoption.
Canada’s energy resources also present a unique opportunity for crypto mining. The country has some of the cheapest energy in the world, making it an ideal location for large-scale crypto mining operations.
Coinbase suggests policy adjustments that would make it easier for Canadians to develop crypto and AI data centers, potentially attracting billions in investment.
Finally, Coinbase calls for updated regulations that would allow banks to safely hold and use crypto, integrate digital asset management into banking services, and ensure that financial institutions do not deny essential services to Web3 businesses.
Canada’s Crypto Future
Despite regulatory challenges, Coinbase remains committed to the Canadian market.
In an exclusive interview with Cryptonews last December, Lucas Matheson highlighted Canada’s strong crypto awareness and relatively clear regulatory framework compared to other jurisdictions.
He emphasized that Coinbase’s registration as a Restricted Dealer with the Canadian Securities Administrators in April 2024 was a significant step in legitimizing crypto operations in the country.
“Canada is actually quite far ahead in terms of regulatory clarity,” Matheson stated, noting that regulatory frameworks have provided a stable foundation for crypto exchanges to operate.
However, he acknowledged that additional reforms are necessary to ensure continued growth and adoption.
Looking forward, whether the next government embraces Coinbase’s recommendations or maintains the status quo, the coming months will determine its fate.
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