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USDT has been successively delisted this year, Canadian securities regulators: will conditionally allow stablecoin trading

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USDT has been successively delisted this year, Canadian securities regulators: will conditionally allow stablecoin trading

The Canadian Securities Administrators have slightly eased their previous high-intensity regulatory approach by issuing a temporary regulatory framework for stablecoins, but whether stablecoin issuers can successfully navigate the hurdles remains a question.

Previously, exchanges in Canada have successively delisted stablecoins:

Coinbase will suspend USDT trading, will there be stricter regulations for stablecoins in Canada?

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Canadian Securities Regulators: Conditional Opening of Stablecoin Trading

According to an announcement by the Canadian Securities Administrators (CSA) on October 5th, as per the CSA announcement, in February of this year, the CSA reiterated that Value-Referenced Crypto Assets (VRCAs), mainly referring to stablecoins, may possess characteristics that constitute securities or derivatives.

However, CSA has recognized that stablecoins may have certain practical uses for Canadian exchange users, and therefore, CSA has decided to open up trading of certain stablecoins under specific conditions.

The conditions include:

  • Issuers: Reserve assets must be held with a qualified custodian.

  • Issuers and Exchanges: Disclosure of relevant information regarding asset governance, operations, and reserves is required.

CSA Announcement

Stablecoin Issuers Must Apply by Year-End

If an exchange wishes to list a stablecoin, the stablecoin issuer must submit a formal commitment document to the CSA to address investor protection issues.

CSA anticipates that issuers can provide the relevant documents by December 1, 2023, and urges early contact with the CSA.

CSA stated:

It will continue to monitor and evaluate the role of stablecoins in the Canadian financial market, and work closely with other international organizations to address the risks associated with such assets. If ad-hoc regulatory arrangements are impractical for certain market participants, we are also willing to consider alternative solutions, provided they address investor protection issues.