The Canadian Securities Administrators (CSA) have confirmed that it is focused on implementing the interim approach to VCRAs (commonly referred to as stablecoins) even as the regulator has announced the extension of the deadline to October 31st, 2024, for its implementation.
The initial deadline of April 30, 2024, after which clients of Crypto Asset Trading Platforms (CTPs) would no longer be permitted to purchase, deposit, or enter crypto contracts to buy or deposit Fiat-Backed Crypto Assets (FBCAs) that do not comply with the interim terms and conditions, has now been extended to October 31st, 2024, due to technical problems reported by CTPs.
The CSA has previously indicated through CSA Staff Notice 21-333, Crypto Asset Trading Platforms: Terms and Conditions for Trading Value-Referenced Crypto Assets with Clients (the Staff Notice), that the regulator may allow, subject to terms and conditions, the continued trading of certain stablecoins that reference a given fiat currency. It had set out interim terms and conditions that would apply to CTPs and the issuers of FBCAs if they wish to continue allowing Canadian clients to purchase or deposit these assets:
- The stablecoin issuer must maintain an appropriate reserve of assets with a qualified custodian, held for the benefit of the crypto asset holder;
- The stablecoin issuer and crypto asset trading platforms that offer them must make certain information related to governance, operations/ and reserve of assets available to the public.
The CSA continues to caution investors that stable coins, including those referencing fiat currencies and satisfying the interim terms and conditions, are subject to various risks and are not the same as fiat currency. The regulator also cautions that because an asset may satisfy its interim terms and conditions, it does not mean the asset is risk-free or somehow endorsed or approved by the organization.
CSA Staff Notice 21-333, Crypto Asset Trading Platforms: Terms and Conditions for Trading Value-Referenced Crypto Assets with Clients, is available for download from CSA members’ websites.
For more information, please call Barbara Hendrickson at BAX Securities Law (647) 403-4606.
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