The Canadian House of Commons Standing Committee on Industry and Technology has released a report recommending that Canada formally recognizes the blockchain industry as an emerging sector and takes necessary steps to support its growth. The report emphasizes the need for regulatory clarity and outlines various recommendations for fostering the industry’s development.
During the study, which involved multiple meetings and input from witnesses and briefs, the report highlighted the diverse applications of blockchain technology, such as cryptocurrencies, supply chains, public sectors, and non-crypto financial innovations. Witnesses commended Canada’s capacity for blockchain innovation and entrepreneurship, stating that the country “punches above its weight” in this field.
The report revealed that while 2.5% of large enterprises in Canada utilized blockchain in 2021, only less than 1% of small and medium-sized enterprises did so. Estimates from witnesses indicated that around 16,000 Canadians were employed in the blockchain industry in 2020, with an additional 13,000 working in cryptocurrency firms by 2022.
Addressing consumer protection, the report acknowledged that Canadian cryptocurrency trading platforms are adequately regulated compared to foreign platforms. It attributed the regulatory efforts to the collapse of the QuadrigaCX trading platform in 2019, which prompted action from authorities. The report also highlighted the vulnerability of small-scale investors who often become targets for bad actors in the crypto market.
In addition to recognition, the report emphasized the need for more regulatory measures and proposed the formulation of a national strategy in collaboration with industry participants. It specifically noted the importance of stablecoin regulation, highlighting the lack of consensus among witnesses regarding whether stablecoins should be considered securities.
Recognizing the potential of blockchain to generate long-term economic growth and job opportunities, the report calls for proactive measures from the government to capitalize on this technology. By implementing the recommendations and developing a comprehensive strategy, Canada can position itself as a global leader in blockchain innovation while mitigating potential risks.
As Canada moves forward, it is crucial to strike a balance between fostering innovation and ensuring regulatory oversight to protect consumers and maintain market integrity. The government’s commitment to supporting the blockchain industry will be instrumental in unlocking its full potential for economic growth and job creation.