“Canada punches above its weight” in blockchain innovation, parliamentarians conclude, but lots more should be done to encourage the industry.
A Canadian House of Commons committee report has recommended that the country “recognize blockchain as an emerging industry,” and take all the steps that entails. There are a lot of steps needed, it said.
The report was released by the Canadian House of Commons Standing Committee on Industry and Technology after a study that involved five meetings and numerous witnesses and briefs. The report outlined uses of blockchain that included cryptocurrency, supply chain and public sector uses and non-crypto financial innovations.
“Canada punches above its weight,” in blockchain innovation and entrepreneurial capacity, one witness for the committee said. In 2021, 2.5% of large enterprises in Canada used blockchain, while less than 1% of small and medium-sized enterprises did so. Witness estimates of the number of Canadians employed in the blockchain industry in 2020 was put at 16,000, and another witness estimated that cryptocurrency firms employed 13,000 Canadians in 2022.
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Citing witnesses, the report stated that “cryptocurrency trading platforms are sufficiently regulated to protect consumers from risks seen from foreign platforms.” It credited the collapse of the Canadian QuadrigaCX trading platform in 2019 for spurring regulators into action. Their efforts continue:
“This increased interest by Canadian regulators is broadly is [in] line with developments in other jurisdictions.”
The report also noted that, while large-scale problems have received most media attention, consumers seeking entry into the crypto market on a small scale are also frequently targeted by bad actors.
A House of Commons committee says blockchain could create 'significant long-term economic and job creation opportunities in Canada,' but experts say Ottawa has a lot of work to do if it wants to seize the technology's potential and avoid drawbacks. https://t.co/D04vrjVDaC
— CBC News (@CBCNews) July 8, 2023
The report recommended to “recognize” the role of blockchain in Canada, which in turn leads to 15 more recommendations that follow from there. More regulatory clarity is needed, the report said, and the government should formulate a national strategy in conjunction with industry participants. The report mentioned stablecoin regulation in particular, noting that even committee witnesses could not agree on whether or not stablecoins are securities.
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