The world of cryptocurrencies is constantly evolving, with new regulations being introduced in various jurisdictions. One such example is the contrasting approaches towards regulation in the United States and Canada. Crypto exchange giant, Coinbase, has shown their preference for the Canadian approach, praising its regulatory clarity and engagement with the industry.
The U.S. Securities and Exchange Commission (SEC) has shown a lack of transparency and consistency in their regulations, causing tension with Coinbase. This ambiguity in U.S. regulation has led to an enforcement action against the exchange for allegedly violating securities laws. The uncertainty surrounding regulations has caused many investors and companies to seek friendlier jurisdictions for their operations.
On the other hand, Canada has introduced the Pre-Registration Undertaking (PRU) regime for crypto exchanges, requiring them to sign up for enhanced regulation. This move pressured several big players to leave the Canadian market, most notably Binance, whose departure has presented an opportunity for Coinbase.
Nana Murugesan, VP international and business development at Coinbase, expressed that the U.S. approach – regulation by enforcement – is particularly challenging for the industry. Companies are left guessing the rules, leading to a lack of clarity. As opposed to this, Canada’s approach is exemplified by what Murugesan calls “regulation by engagement,” which he states that Coinbase wholeheartedly appreciates.
The company signed Canada’s enhanced PRU in March and is now under the oversight of the Ontario Securities Commission (OSC). This regulatory clarity and Binance leaving the market has created a significant opportunity for Coinbase to solidify its presence in the country.
One of the key developments being rolled out by Coinbase in Canada, as mentioned by Lucas Matheson, the Coinbase Canada Country Director, includes a more seamless fiat-to-crypto experience for Canadian customers. This will involve introducing Interac payment rails within the next few months, ensuring a stronger connection between local financial institutions and the electronic payment system.
With regulatory clarity in place and rivals like Binance out of the market, Canada has become a strong prospect for Coinbase to expand its operations. While Murugesan did not comment on their competition, he indicated that the developments in Canada align well with the company’s playbook.
These contrasting regulatory approaches in the United States and Canada provide valuable insights into the impact of regulatory strategies on the industry. It highlights the importance of transparent, engaging, and consistent regulations to allow companies to grow and thrive in a supportive environment. With the ever-changing landscape of the crypto world, it remains to be seen which regulatory approach will ultimately prove more successful in providing a stable and secure foundation for cryptocurrencies and their holders.
Source: Coindesk
