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ARTICLE · 16 MARCH 2023

Stability And Security: The CSA's Characterization Of Stablecoins

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On February 22, 2023, the Canadian Securities Administrators (CSA) published Staff Notice 21-332, Crypto Asset Trading Platforms: Pre-Registration Undertakings—Changes to Enhance...

CanadaTechnology
Mohammed Muraj
Mohammed Muraj
Konata Lake
Konata Lake
Glen Johnson
Glen Johnson
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On February 22, 2023, the Canadian Securities Administrators (CSA) published Staff Notice 21-332, Crypto Asset Trading Platforms: Pre-Registration Undertakings—Changes to Enhance Canadian Investor Protection, in which the CSA shared its views on the characterization of stablecoins and outlined its requirements for crypto asset trading platforms trading in crypto contracts for stablecoins.

What you need to know

  • CSA staff are of the view that asset backed stablecoins generally meet the definition of "security" and/or would meet the definition of "derivative" in several Canadian jurisdictions.
  • Crypto asset trading platforms are not permitted to trade crypto contracts for stablecoins without the prior written consent of the CSA and are required to conduct sufficient due diligence to address the applicable risks of such stablecoins.

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