Canada lags with stablecoin approach, but there’s room to catch up

Published

2 months ago

May 15, 2025

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Canada lags with stablecoin approach, but there’s room to catch up

The slow adoption of stablecoins in Canada has some local crypto industry observers concerned that the country is falling behind.

The Canadian Securities Administrators (CSA) classified stablecoins as “securities and/or derivatives” in December 2022 after the FTX debacle that shook markets and turned many lawmakers against the crypto industry.

Regulating stablecoins as a security has seen few local stablecoin issuers arise, but in the United States and the European Union, softening regulations have seen significant growth in the stablecoin market. This makes Canada, observers say, less competitive with other jurisdictions.

Of particular concern is the perceived gap in peer-to-peer (P2P) payments in Canada, which stablecoins are uniquely qualified to fill.

Local law constrains stablecoin growth and threatens dollar

In 2022, as the crypto market reeled from the collapse of FTX and the implosion of the Terra stablecoin system, regulators worldwide began to look more critically at the crypto space.

In Canada, the CSA updated regulations for crypto exchanges and brought stablecoins under its purview, classifying them as securities/derivatives. This hasn’t been a popular decision with Canada’s crypto industry.

Morva Rohani, founding managing director of the Canadian Web3 Council, told Cointelegraph that the CSA’s case-by-case basis for considering stablecoin issuers and the lack of a federal framework make for a “patchwork” regulatory regime.

“Canada’s reliance on securities law to regulate payment stablecoins introduces significant legal and operational uncertainty,” she said.

Tanim Rasul, chief operating officer of Canadian crypto exchange NDAX, said that the CSA “got it wrong,” stating that other regulatory frameworks, like the EU’s Markets in Crypto-Assets (MiCA) law, were more appropriate.

“I would just say, look at MiCA, look at the way they’re approaching stablecoins. It’s a payment instrument. It should be regulated as such,” he told a crowd at the Blockchain Futurist Conference in Toronto on May 13.

It’s not just the EU. Singapore and the UAE have also introduced regulatory frameworks for stablecoins, and US senators are optimistic they will pass a stablecoin law by May 26.

Rohani said Canada is “out of step with leading global jurisdictions […] which have adopted tailored, prudential frameworks that recognize stablecoins as payment instruments.”

This lack of alignment with other, more pro-stablecoin jurisdictions could have negative effects for the Canadian dollar (CAD), some worry.

Som Seif, founder of Canadian investment firm Purpose Financial, said that the proliferation of other major stablecoins, mostly denominated in the US dollar, could threaten the use of the loonie (a nickname for the Canadian dollar) at home.

“If Canada does not create the regulatory framework and environment that encourages the development of CAD stablecoins, consumers and businesses will default to using USD-pegged alternatives, eroding the relevance of CAD in global markets,” he said.

Stablecoins provide cheaper P2P payments but reputation is also a roadblock

Members of the Canadian crypto industry have stated that stablecoins have a role to play in the country as well, given the purported lack of P2P payment networks available in the country.

Speaking to Cointelegraph on May 13, Coinbase Canada CEO Lucas Matheson said, “It’s really important that we have a stablecoin for Canadians.” He said that the only options currently open were wire transfers, which “cost $45 and take 45 minutes of paperwork.”

Rohani said that Interac e-Transfer, a Canadian funds transfer service, “remains the primary domestic P2P rail, operating through banks and credit unions.”

Canada does have apps like PayPal and Wise, which support international P2P transfers, but those often come with high commissions and slow settlement times compared to stablecoins.

Rohani said that while some crypto platforms allow for P2P transfers, they’re not widely used due to a lack of integration into mainstream financial services.

Demand for more and different digital payment methods is growing in Canada, according to the 2024 digital payments report from Payments Canada, the owner and operator of Canada’s payment clearing and settlement infrastructure.

But that demand may not translate directly into stablecoins. Crypto’s “journey towards financial integration among Canadians remains a distant prospect,” the report reads. Some 91% of Canadians have never used crypto as a payment.

Payments Canada attributes the lack of interest to the assets being perceived as the “least secure payment method among Canadians compared to alternatives such as cash, credit cards, cheques, wire transfers and PayPal.”

Even in the context of a central bank digital currency, which the crypto industry generally regards as a less favorable option to private, fiat-denominated stablecoins, interest just isn’t there. The survey found that 85% of respondents “did not envision themselves using a digital Canadian dollar and preferred their existing payment methods.”

Is PM Carney pro-crypto?

If more tailor-made regulations could integrate stablecoins with the mainstream payment options Canadians are comfortable with, it would still take a concerted effort from policymakers in Ottawa, where the Liberals have just won the federal elections.

The crypto industry had cause for doubt. Liberal Prime Minister Mark Carney has previously expressed skepticism about cryptocurrency. In a speech as Governor of the Bank of England, he said they had failed as money.

Still, he acknowledged stablecoins have a role to play in retail and wholesale payments. He said in 2021 that stablecoins should have access to central bank balance sheets — but only if strong protections were in place.

“There’s been two systemic crises in money funds in little more than a decade […] In baseball, it’s three strikes and you’re out. In cricket, it’s only the equivalent of one. For systemic payment systems, one is too many,” Carney stated.

Kohani said, “With Mark Carney at the helm of the Liberal Party, we anticipate a pragmatic but regulation-first approach to crypto and stablecoins.”

While his previous openness toward stablecoins suggests he’s open to the technology, he also “emphasizes the need for regulation, oversight and safeguards.”

Another Liberal term, per Kohani, will likely mean the CSA continues to lead enforcement but could result in broader policy work, including a framework on stablecoins, “particularly if positioned as a tool for payments modernization and maintaining the relevance of the Canadian dollar.”

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Politics

US CLARITY bill could allow Tesla and Meta to evade SEC rules — Senator Warren

Published

3 hours ago

July 9, 2025

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US CLARITY bill could allow Tesla and Meta to evade SEC rules — Senator Warren

The legislation to establish crypto market structure is one of three bills the US House of Representatives is expected to consider starting next week.

Politics

What is a wealth tax, how would it work in the UK and where else has one?

Published

5 hours ago

July 9, 2025

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What is a wealth tax, how would it work in the UK and where else has one?

The idea of a wealth tax has raised its head – yet again – as the government attempts to balance its books.

Downing Street refused to rule out a wealth tax after former Labour leader Lord Kinnock told Sky News he thinks the government should introduce one.

Sir Keir Starmer’s spokesman said: “The prime minister has repeatedly said those with the broadest shoulders should carry the largest burden.”

While there has never been a wealth tax in the UK, the notion was raised under Rishi Sunak after the COVID years – and rejected – and both Harold Wilson’s and James Callaghan’s Labour governments in the 1970s seriously considered implementing one.

Sky News looks at what a wealth tax is, how it could work in the UK, and which countries already have one.

What is a wealth tax?

A wealth tax is aimed at reducing economic inequality to redistribute wealth and to raise revenue.

It is a direct levy on all, or most of, an individual’s, household’s or business’s total net wealth, rather than their income.

The tax typically includes the total market value of assets, including savings, investments, property and other forms of wealth – minus a person’s debts.

Unlike capital gains tax, which is paid when an asset is sold at a profit, a wealth tax is normally an annual charge based on the value of assets owned, even if they are not sold.

A one-off wealth tax, often used after major crises, could also be an option to raise a substantial amount of revenue in one go.

How could it work in the UK?

Advocates of a UK wealth tax, including Lord Kinnock, have proposed an annual 2% tax on wealth above £10m.

Wealth tax campaign group Tax Justice UK has calculated this would affect about 20,000 people – fewer than 0.04% of the population – and raise £24bn a year.

Because of how few people would pay it, Tax Justice says that would make it easy for HMRC to collect the tax.

The group proposes people self-declare asset values, backed up by a compliance team at HMRC who could have a register of assets.

Which countries have or have had a wealth tax?

In 1990, 12 OECD (Organisation for Economic Co-operation and Development) countries had a net wealth tax, but just four have one now: Colombia, Norway, Spain and Switzerland.

France and Italy levy wealth taxes on selected assets.

Colombia

Since 2023, residents in the South American country are subject to tax on their worldwide wealth, but can exclude the value of their household up to 509m pesos (£92,500).

The tax is progressive, ranging from a 0.5% rate to 1.5% for the most wealthy until next year, then 1% for the wealthiest from 2027.

Norway

There is a 0.525% municipal wealth tax for individuals with net wealth exceeding 1.7m kroner (about £125,000) or 3.52m kroner (£256,000) for spouses.

Norway also has a state wealth tax of 0.475% based on assets exceeding a net capital tax basis of 1.7m kroner (£125,000) or 3.52m kroner (£256,000) for spouses, and 0.575% for net wealth in excess of 20.7m kroner (£1.5m).

The maximum combined wealth tax rate is 1.1%.

The Norwegian Labour coalition government also increased dividend tax to 20% in 2023, and with the wealth tax, it prompted about 80 affluent business owners, with an estimated net worth of £40bn, to leave Norway.

Spain

Residents in Spain have to pay a progressive wealth tax on worldwide assets, with a €700,000 (£600,000) tax free allowance per person in most areas and homes up to €300,000 (£250,000) tax exempt.

The progressive rate goes from 0.2% for taxable income for assets of €167,129 (£144,000) up to 3.5% for taxable income of €10.6m (£9.146m) and above.

It has been reported that more than 12,000 multimillionaires have left Spain since the government introduced the higher levy at the end of 2022.

Switzerland

All of the country’s cantons (districts) have a net wealth tax based on a person’s taxable net worth – different to total net worth.

It takes into account the balance of an individual’s worldwide gross assets, including bank account balances, bonds, shares, life insurances, cars, boats, properties, paintings, jewellery – minus debts.

Switzerland also works on a progressive rate, ranging from 0.3% to 0.5%, with a relatively low starting point at which people are taxed on their wealth, such as 50,000 CHF (£46,200) in several cantons.

Politics

Jingye and Whitehall officials hold talks over British Steel future

Published

8 hours ago

July 9, 2025

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Jingye and Whitehall officials hold talks over British Steel future

The Chinese owner of British Steel has held fresh talks with government officials in a bid to break the impasse over ministers’ determination not to compensate it for seizing control of the company.

Sky News has learnt that executives from Jingye Group met senior civil servants from the Department for Business and Trade (DBT) late last week to discuss ways to resolve the standoff.

Whitehall sources said the talks had been cordial, but that no meaningful progress had been made towards a resolution.

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Jingye wants the government to agree to pay it hundreds of millions of pounds for taking control of British Steel in April – a move triggered by the Chinese group’s preparations for the permanent closure of its blast furnaces in Scunthorpe.

Such a move would have cost thousands of jobs and ended Britain’s centuries-old ability to produce virgin steel.

Jingye had been in talks for months to seek £1bn in state aid to facilitate the Scunthorpe plant’s transition to greener steelmaking, but was offered just half that sum by ministers.

British Steel has not yet been formally nationalised, although that remains a probable outcome.

Jonathan Reynolds, the business secretary, has previously dismissed the idea of compensating Jingye, saying British Steel’s equity was essentially worthless.

Last month, he met his Chinese counterpart, where the issue of British Steel was discussed between the two governments in person for the first time.

Jingye has hired the leading City law firm Linklaters to explore the recovery of hundreds of millions of pounds it invested in the Scunthorpe-based company before the government seized control of it.

News of last week’s meeting comes as British steelmakers face an anxious wait to learn whether their exports to the US face swingeing tariffs as part of US President Donald Trump’s trade war.

Sky News’s economics and data editor, Ed Conway, revealed this week that the UK would miss a White House-imposed deadline to agree a trade deal on steel and aluminium this week.

Jingye declined to comment, while a spokesman for the Department for Business and Trade said: “We acted quickly to ensure the continued operations of the blast furnaces but recognise that securing British Steel’s long-term future requires private sector investment.

“We have not nationalised British Steel and are working closely with Jingye on options for the future, and we will continue work on determining the best long-term sustainable future for the site.”