Govt around the world are getting threatened with the crypto and blockchain. Some attempts are being made to centralized it. Some cases where they can't is where we are going to be seeing the regulation and the policies that would be controlling the decentralized nature of such currencies.
In case of Canada, they have the Canadian Securities Administrators (CSA), that are ammending the variety of new regulations and the changes as they see the market reactions and the issues that they are facing while trying to regulate the blockchain based currencies in the market. Find the references here.
So they have decided to formulate the regulations that would be applying to the crypto in and out of internal and direct funds investment into the market of crypto. These are the rules which are into the discussion and the consultation phase as of now.
Let's talk about how the new prorposed changes are likely to be applied by the canadian securities administrators.
What qualifies as a Crypto Assets?
Canadian regulators are worried about what goes into the blockchain and the crypto. And how they can have the assets specific to the chain. So they are trying to define the digital assets and trying to classify the assets in such a way that you'd be able to regulate them. So the first attempt is being made in the definition about the crypto assets.
You can check the reference for this here
Market consultation is being taken through the regulation document and there would be proposed changes for the crypto assets. CSA is interested in knowing which of the market protocols make the NFTs and the other digital assets which would have a price tag on it.
Investing in crypto assets which are Listed
Another change in the document that you would find is that it is attempting to regulte whether the asset is listed in the exchange. Like say some coins which are not listed in the exchange are ignored or considered not legal. As they are taken as something that is being bypassed the regulations. So for example if any random coin created today if not listed in indexes like coinmarketcap or say binance they may ignore in regulation and treat it as not legal.
You can find the reference to this in the document with changes in 81-102CP section. Find the same here.
So if the crypto assets which are listed in the traded funds. Like say blackrock or so they too have to follow this approach for the legal validation through the regulatories. And just directly adding into the funds, derivatives and ETF won't be allowed unless the asset follows the regulation approach. So the decentralized assets are totally ignored.
Crypto Custody Regulation
Crypto custody system has already started in canada. And they have decided to ammend the regulation for the crypto assets like say Spot ETF. Those assets are going to be soon revised through what is allowed and disallowed in the regulation discussion. There are few things they are very serious about in this category.
For example, they want the firms and the companies who are into the crypto custody to have the required specific expertise before they can push for the service. They are also paying attention to maintenance of such tech so that assets are safe and secure for reuse and transfers. They pay attention on the small details like multi signature system. Wallet systems are also discussed in this regulatory document which would be another strong indicator that canada is into heavy regulation.
You can check the section 8.1 of the 81-102CP document here for the references.
Canadian securities administrators are taking the consultation on the upcoming regulatory changes on digital assets and they would ammend changes based on the market feedback. Things remain to be seen the upcoming exchanges and the crypto custody companies who would get licenses after these updated changes.