The Canadian Government Has Delayed Enacting New Crypto Regulations Until Late 2019

Regulation 2 min, 46 sec READ

by Chris Madill

Canada has delayed enacting new crypto-regulations by over a year, leaving many crypto businesses without defined guidance from regulators.

Canadian officials have delayed the release of the country's proposed updates to cryptocurrency regulations until late 2019. The new regulatory framework was meant for publication in the Canada Gazette by fall 2018, but with the federal government currently gearing up for the 2019 election, the decision has been made to move forward with the country’s existing regulations until further notice.

With the current regulations remaining in place, some cryptocurrency and blockchain companies are breathing a sigh of relief as the new rules proposed by the Canadian government are much stricter than the existing regulations governing the space. But, despite the “grey area” provided by the lack of a defined legal framework, the consensus among blockchain industry leaders in Canada is actually in favor of establishing a new, firm and industry-specific set of guidelines for those businesses that wish to develop their products and services. 

Kyle Kemper, a Blockchain Association of Canada (BAC) executive, told Bitcoin Magazine,

The decision to delay the proposed regulations bodes well for the Canadian blockchain and cryptocurrency space. The government is committed to an innovation agenda and sometimes... it may be best to observe and intervene as little as possible.

Coinsquare CEO, Cole Diamond, sees the issue as a double-edged sword. While delaying the new regulations keeps businesses in the dark as to what they can and can’t do, rushing to push through new regulations could lead to oversight,

I don’t think that delaying regulatory clarity is a good thing. At the same time, I understand how complex this market is. The regulators are still learning, and I can assure everyone that they are trying. / Coinsquare CEO, Cole Diamond

In contrast, Toronto-based lawyer Evan Thomas sees the issue through the eyes of his eager clients. He says Canadian businesses are at a disadvantage when compared to the greater global industry, and Canadian officials need to provide guidance sooner rather than later if Canada is to compete in the growing global crypto industry,

Other jurisdictions are moving more quickly to establish regulatory frameworks around crypto, to the extent those frameworks don't already exist. [...] Until the regulations are final, it will be challenging for Canadian crypto businesses to establish critical banking and other relationships because many financial sector players are waiting for a regulatory framework to be in place. The longer the delay, the harder it may be for the industry to grow in the meantime. / Evan Thomas, Osler Litigation Group

Today, the crypto industry is seeing a rapidly changing regulatory landscape, which is extremely hard for businesses to navigate. The grey-areas and blind spots behind which much of the crypto-industry has flourished are now being erased in favor of a stricter set of rules and a higher level of scrutiny from financial regulators, but the process is painstakingly slow. Canada is not alone in its decision to delay the country’s new cryptocurrency laws, with India and the G20 also recently announcing delays to their crypto legislation, and these delays may please those businesses that rely on grey areas in order to provide their services, but ultimately, the delays will only diminish the legitimacy needed to foster a healthy and productive crypto industry.