Canada’s Regulators Clarify Interim Stablecoin Regulations Amid Market Concerns
The Canadian Securities Administrators (CSA) has released interim terms and conditions to guide cryptocurrency exchanges and asset issuers on stablecoin investments following its previous decision.
The umbrella regulatory body seeks to clarify the issues raised in its interim approach to “value-referenced crypto assets” popularly referred to as stablecoins.
This year, the CSA reaffirmed its view that several stablecoins may constitute securities or derivatives placing them under the ban on trading cryptocurrencies viewed as securities.
Following widespread uncertainty in the market and several speculations, the Canadian regulator released terms and conditions that would apply to stablecoin issuers and exchanges if they were to carry on their regular activities.
Stan Magidson, the CSA Chair and the of Alberta Securities Commission noted that these regulations aim to protect investors and improve trust in the market
“The transparency of value-referenced crypto assets about the composition and adequacy of their reserves and their governance are critical issues that must be addressed to protect Canadian investors and the integrity of our capital markets.”
According to the release, every stablecoin issuer must maintain adequate and verifiable reserves with a qualified custodian for their adopters.
This clause aims to prevent hiccups caused by market volatility or fraudulent activities that can make an asset lose its leg to the underlying currency leading to sharp losses.
Stablecoins are digital assets whose values are backed by an underlying currency, usually the dollar.
As a result of this peculiarity, the values of stablecoins enjoy stability, unlike other cryptocurrencies that are largely volatile.
This makes stablecoin a
Read more on cryptonews.com
