Canada must stop dragging its feet on crypto regulation

Eric Richmond is the chief executive officer and country director of Coinbase Canada.

The Stablecoin Act recently came into force, and proposed regulations were released on Oct. 23. The act provides a federal framework for government-backed stablecoins and recognizes them as payment instruments rather than securities. Until now, all cryptocurrencies have been regulated by securities watchdogs.

The law itself is a major achievement for financial innovation in this country. It is already having an effect on the rest of the market.

Six of Canada’s largest banks recently announced a joint initiative to build shared infrastructure for tokenized deposits after a ruling by the Office of the Superintendent of Financial Institutions that such deposits – those issued on a blockchain – are legally equivalent to traditional deposits.

But for the most part, if you want to launch a digital assets-related business in Canada in 2026, you’ll still run into friction and delays, owing to the amount of contradictory and cumbersome regulation involved.

It’s now been six months since the act became law. Meanwhile, the consultations needed to bring the framework into force will take another two months. We’re dragging our feet while the U.S., EU, and Britain press ahead with similar laws.

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Canada has what is required to be a global leader in crypto, including world-class talent and one of the highest rates of crypto ownership anywhere. Still, the state of crypto regulation is fragmented across the country. Provinces and territories co-ordinate through the Canadian Securities Administrators (CSA), but ultimately set their own rules for crypto.

Canada is the only G7 country without a national securities regulator, which would provide a simpler foundation for businesses operating across the country. A national regulator would give financial institutions one rule book and processes for registration that apply across the country. But until that exists, we should at minimum establish a consistent, national framework for digital assets. The lack of standardized, national rules leaves digital-asset companies with limited pathways to get regulated digital financial products to consumers.

The Canadian Bitcoin Consortium, an advocacy group for the cryptocurrency ecosystem, said of Friday’s regulations: “Most issuers and platforms will still need to navigate both regimes with the Bank of Canada and the Canadian Securities Commission. This will create a burden to manage extra compliance work to be compliant with the current framework.”

An asset class held by one in four Canadians needs a standardized regulatory model. According to a recent Ontario Securities Commission survey, ownership has more than doubled since 2023. Demand for digital assets is quickly outgrowing the avenues we have to regulate them.

Today, digital-asset regulation in Canada remains a patchwork, with no standardized framework designed specifically for cryptocurrencies and digital assets. Instead, products and platforms are governed through “staff notices” from regulators, which provide guidance on how existing rules apply and grant exemptions to individual companies, mostly at the provincial level.

Crypto trading platforms have repeatedly received similar case-by-case exemptions to operate in Canada, but the terms are not applied uniformly. Even the “restricted dealer” classification that allows digital-asset platforms to operate was originally introduced to streamline investment dealer categories, not to regulate digital assets.

This inconsistency puts recruitment to the industry at risk at a time when the tech sector is already struggling to retain its top talent. A 2025 study found that only 32 per cent of high-potential startups launched by Canadian founders in 2024 were headquartered in Canada, down from more than 67 per cent in the late 2010s, and almost half set up in the U.S. instead.

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Digital-asset founders face the same retention challenges, plus a regulatory process that adds time and legal costs. Efforts to keep technology innovators in Canada are mentioned regularly in federal statements and initiatives, but we still ask digital-asset innovators to take on undue risk and expense to stay here.

The one upside to these one-off rulings is that they give us a strong foundation for legislation. Our first step should be to standardize and codify these exemptions and staff notices into a single framework.

We should then create clearer pathways for licensing, registration and raising funds for new businesses, so crypto and other digital asset start-ups face fewer open-ended legal questions. Finally, we should codify digital assets based on what they do and regulate them accordingly.

Outside of Canada, regulators are moving quickly to give people clarity. In the EU, Markets in Crypto-Assets (MiCA) regulation is in force, Britain is consulting on its own digital assets framework, and the UAE has established comprehensive licensing systems for crypto businesses.

The U.S.’s Clarity Act, which establishes a framework for regulating digital assets, failed to advance in the Senate in September. Meanwhile, the SEC has moved ahead with its own crypto rulemaking.

Canada will need to move faster to meet growing global standards.