In Canada, CSA Extends Stablecoin Compliance Deadline to December 2024

Key Takeaways

• Initially set for October 31, 2024, the new deadline is now December 31, 2024.
• The extension is intended to provide more time for crypto trading platforms to either comply with the terms and conditions or to propose alternatives that address investor protection concerns

The Canadian Securities Administrators (CSA) have extended the deadline for cryptocurrency trading platforms to comply with updated stablecoin regulations. Initially set for October 31, 2024, the new deadline is now December 31, 2024. The extension was granted due to technical issues faced by platforms, allowing them more time to meet the requirements or propose alternative solutions to safeguard investors.

“The extension is intended to provide more time for CTPs(crypto trading platforms) to either comply with the terms and conditions […] or to propose alternatives that address investor protection concerns, as long as any alternatives are in place […] prior to December 31, 2024. ” 

The CSA first introduced restrictions on value-referenced crypto assets (VRCAs) in February 2023. These rules banned algorithmic stablecoins not backed by a single fiat currency but allowed fiat-backed stablecoins to continue trading under specific conditions until stricter regulations took effect. The new framework was originally scheduled for enforcement by April 2024.

Despite global regulatory efforts, Canada still lacks a comprehensive framework for overseeing stablecoins. However, the CSA has reaffirmed its commitment to protecting Canadian investors from the risks associated with trading digital assets. “The CSA has actively engaged with CTPs and crypto industry participants and remains open to proposals for alternative ways to address investor protection concerns raised by VRCAs,” the regulator said in its announcement.

The most recent extension will provide crypto platforms with additional time to comply with the conditions outlined or suggest alternative measures that ensure the protection of investors.

By December 29, 2023, platforms are expected to halt trading any stablecoins not backed by a single fiat currency. Despite these actions, the CSA cautioned that holding value-referenced crypto assets on Canadian platforms does not offer the same level of protection as regulated deposits.

The CSA also highlighted the ongoing global uncertainty regarding stablecoin regulations, noting that Canada is still working to establish a concrete structure for these assets. In the meantime, the regulator has advised investors to be aware of the risks involved with cryptocurrencies, which can be more volatile than traditional fiat currencies.