Canada extends time for crypto exchanges to comply with stablecoins rules

In a recent article, Canada’s financial regulatory body, the Canadian Securities Administrators (CSA) stated that crypto exchanges have more time to follow the new rules and regulations of stablecoins.

The initial deadline was on April 30, then it was changed to October 31 but now the new deadline is set at December 31.

In early 2023, the CSA introduced restrictions on value-referenced crypto assets (VRCAs). The regulations prohibit any stablecoin that is not backed by single fiat currencies. This means algorithmic stablecoins like DAI do not follow the CSA’s rules. The CSA allowed crypto exchanges to offer stablecoins backed by single fiat currency (FBCAs) until it activated the rules on April 30.

Technical issues delay compliance

Crypto exchanges faced technical issues in meeting the initial deadline of April 30. The CSA set a new date for October 31, and it has now pushed the deadline further to December 31.

The Canadian government body stated that it is willing to consider other approaches for achieving or applying the rules and regulations. Additionally, the CSA stated that it’s open to alternative proposals that protect investors as long as they are in place and prior to the new deadline.

“After December 31, 2024, registered CTPs or CTPs that provided a PRU can only offer VRCAs that comply with the conditions of their registration and exemptive relief decisions, or their PRUs.” ~ The Canadian Securities Administrators (CSA)

Crypto exchanges leave Canada

Many crypto exchanges stopped serving Canadian citizens and residents and decided to leave. This is due to difficulty in meeting Canada’s regulations. Exchanges such as Binance, OKX, and KuCoin stopped their operation during the past two years.

In late 2023, Binance put all Canadian customers into liquidation mode. OKX sent an email to Canadian users saying that it will no longer provide them services or allow them to create new accounts. KuCoin was banned by the Ontario Securities Commission (OSC) in 2022.

On the other hand, Kraken, Coinbase, and Gemini decided to stay in Canada. Kraken filed a Pre-Registration Undertaking (PRU) with the OSC back in 2023, attaining a restricted dealer status. Gemini and Coinbase are operating in Canada as restricted dealers as well.