Crypto Leaders Warn Regulatory Vacuum Stifling Canadian Innovation
AI-generated image · Bay Street Wire
Industry figures argue that jurisdictional disputes and risk aversion are driving tech firms toward the United States.
Industry leaders are calling for urgent regulatory clarity to prevent a continued exodus of cryptocurrency firms from Canada. As BetaKit first reported, during a panel at the Blockchain Futurist Conference in Toronto, speakers from the Canadian Securities Exchange (CSE), Shakepay, Tetra Digital Group, and Grinhaus Law Firm warned that the country is losing its competitive edge.
Richard Carleton, CEO of the CSE and non-executive chair of Tetra, criticized ongoing federal-provincial jurisdictional challenges, stating that Canada cannot afford to engage in "endless" disputes. This sentiment was echoed by Conservative shadow minister for national revenue and MP Jasraj Hallan, who noted significant fragmentation between federal and provincial regulators. Hallan urged the federal government to transform the Stablecoin Act into a "workable framework" with a clear registration timeline.
While the Stablecoin Act received royal assent in March, the Department of Finance is still developing supporting regulations, which are not targeted for implementation until 2027. Budget 2025 committed the government to a framework for fiat-backed stablecoins issued by non-financial institutions, but critics argue the pace is too slow. Grinhaus founder Aaron Grinhaus stated that Canada is "not competitive anymore" and must improve its tax and regulatory regimes to stop firms from fleeing to other jurisdictions, specifically the U.S., where the Digital Asset Market Clarity Act and GENIUS Act are advancing.
Carlo Campisi, head of policy at Shakepay, argued that Canada has "overindexed" on risk aversion and consumer protection. However, Campisi noted a potential shift in mindset via a new OSFI pilot designed to fast-track banking license applications for crypto companies.