Canada Tightens Regulatory Oversight for Crypto Exchanges

The Canadian Securities Administration (CSA), the nation’s financial regulator has released new guidelines to govern crypto market participants in the country. The new guidelines require all bitcoin (BTC) trading venues and crypto exchanges to come under its purview and operate in total compliance with securities law, according to a Finance Magnates report on January 17, 2020.

Canada Tightens Crypto Regulatory Oversight 

At a time when the price of Bitcoin (BTC) and altcoins have started to rise again, with analysts saying that another bull season may be upon us, Canadian authorities have formulated new guidelines to govern crypto market participants, as part of larger plans to provide regularity clarity.

Per sources close to the matter, The Canadian Securities Administration (CAS) has made it clear that all centralized digital assets exchanges in the region as well as those servicing Canadian residents from other locations, must abide by its securities law.

The latest guidelines stipulate that the securities law applies to all crypto exchanges and bitcoin-linked businesses facilitating the trading of securities or assets, as well as those handling the buying and selling of cryptos such as bitcoin, which falls under the commodities category.

Eliminating Crypto Regulatory Uncertainty

Commenting on the new guideline, Louis Morisset, who doubles as the Chairman of the CSA and President and CEO of the Autorite des Marches Financiers AMF, the independent body overseeing France’s financial markets reiterated that the new legislation will allow crypto market participants to “determine whether their business is subject to securities legislation.”

Though the CSA’s move has reportedly been criticized by some market participants, the agency has however made it clear that it’s focused on creating an enabling environment for fintech businesses and new technologies to thrive.

Morisset added:

The rapidly evolving crypto ecosystem makes it necessary for us to clarify our regulatory framework to better support fintech businesses looking to offer innovative products, services, and applications in Canada.

With the new legislation now live, the CAS has stated categorically that both exchanges based in Canada and those abroad, who fail to observe the securities law will be punished accordingly.

As cryptos and the underlying distributed ledger technology (DLT) continue to gain traction, authorities around the world are now paying moreattention to the industry, in terms of regulation.

BITCOINBitcoin’s 9.5 years of existence probably equal to 50.8 years of stock trading

The cryptocurrency market is often discredited for its shorter period of existence. When compared to traditional markets, Bitcoin’s market has had only 10 years of active trading, which is why people tend to constantly overlook its sustainability in the longer run.

This popular opinion was recently called into question after Sean Nance, a Bitcoin trader, drew a comparison between traditional stock market trading and the Bitcoin trading market. According to Nance, stock market trading has been operational for approx 1638 hours a year, a figure which is easily trumped by Bitcoin’s 8760 hours/year activity. When illustrated in terms of year duration, for every 1 year of active stock trading, Bitcoins registered close to 5.3 years of activity.

Therefore, Bitcoin’s 9.5 years of existence is equal to around 50.8 years of stock trading.

Another example taken by Nance was a comparison with the forex market. The forex market has been active for 5972 hours a year, which pans out to be about 1.5 years of crypto-trading per year of forex trading. Hence, historically, Bitcoin’s been active for 13.9 years with respect to forex trading time.

The aforementioned comparison is insightful because it contradicts the common assumption that the cryptocurrency market has not matured enough in the trading market yet, a factor due to which traditional investors often avoid entering its ecosystem.

Moreover, Nance also laid down a chart comparison between Bitcoin’s weekly chart with Dow Jones’ Industrial 37 day chart. Nance indicated that Bitcoin reached $20,000 way faster periodically since it had way more active hours over the last decade. However, Nance also clarified that the maturity rate suggested that its growth was more as an asset than as a form of currency. He said,

“It trades more like an asset than it does like a currency. So far the charts are more comparable, and we should hope it continues that way because currencies don’t typically display unlimited growth.

The aforementioned comparison adds significant weight to Bitcoin’s market and its credibility, something which has been consistently undermined by traditional market traders.

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