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(Kitco News) - Lawmakers in Canada have released a report outlining the findings of their investigation into blockchain technology and cryptocurrencies, which concluded that the industry has “significant, long-term” potential and provided recommendations for regulating the industry.
The Canadian House of Commons’ Standing Committee on Industry and Technology published the report, entitled “Blockchain Technology: Cryptocurrencies and Beyond,” which includes 16 recommendations for the Government of Canada to help support and grow the nation's blockchain and cryptocurrency industry.
The information contained in the report was generated from five meetings the committee had with a total of 31 witnesses from the blockchain industry who reported on the contributions the technology is making to the Canadian economy and the potential for it to provide greater value in the future.
“While most of the present value is in the variety of actors participating in the cryptocurrency industry, the Committee was impressed by testimony regarding the technology’s current and potential applications in other sectors,” the report said. “Blockchain, together with other technological advances like artificial intelligence, have the potential to digitalize the parts of our economy that have not been digitalized already, unlocking efficiencies and value similar to previous waves of digitalization.”
Based on the testimony from witnesses and recent events that affected the broader cryptocurrency market, the committee provided the following list of recommendations for the government to implement in the future.
The committee recommends that the “Government of Canada:
- Recognize blockchain as an emerging industry in Canada, with significant long-term economic and job creation opportunities.
- Should, in its efforts to improve consumer protection and regulatory clarity to the emerging and innovative field of digital assets, be guided by the principle that individuals’ right to self-custody should be protected and that ease of access to safe and reliable on and off ramps should be defended and promoted.
- Establish a national blockchain strategy that clarifies the government’s policy direction and regulatory approach, and demonstrates support for the industry.
- Call on a group of experts, entrepreneurs, academics, investors, and AI experts to support its analysis and understanding and help it determine best steps, including the creation of a platform for exchange and monitoring.
- Pursue opportunities for international cooperation in the development of blockchain regulations and policies, including with our major trading partners.
- Conduct innovative pilot projects using distributed ledgers to help strengthen the ecosystem and recognize up-and-coming businesses.
- Create a sandbox where entrepreneurs can test technologies unhindered by as yet unadopted regulations.
- Adopt a distinct regulatory approach to stablecoins that reflects the difference between these products and other cryptocurrencies, and account for the unique regulatory challenges they present.
- Adopt regulatory changes to promote the establishment of federally regulated cryptocurrency custodians to meet the demand for cold storage services from Canadian cryptocurrency firms.
- Adopt measures for access to banking and insurance services for blockchain firms, including through Crown corporations.
- Establish a public awareness campaign, in consultation with the provinces and the industry, to educate the public about risks related to cryptocurrencies and the benefits of accessing cryptocurrency markets through regulated Canadian entities.
- Draw on the previous report on SMEs and launch a strategic initiative to develop skills and talent and support research.
- Investigate ways to promote the adoption of blockchain technology in supply chains.
- Undertake a study on the new opportunities this technology presents for electronic voting, consultation, and the modernization of our democratic institutions.
- Investigate equity between provinces in the application of the Excise Tax Act to mining activities to ensure fair taxation.
- Maintain that digital asset mining constitutes a commercial activity in Canada; and as such adopt a neutral and equitable position towards this new and growing industry.”
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| Canadian regulator adds new requirements for crypto exchanges seeking registration |
The authors of the report said they put forth these recommendations to help the Canadian government design its national blockchain strategy in a manner that solidifies the country’s leadership in the digital asset economy.
According to data provided by the Bank of Canada, as of the end of 2021, 13% of Canadians said they own crypto assets or crypto funds through the end of 2021 and 38% believe crypto assets play a key role in the financial system.
