Cryptocurrency and blockchain groups in Canada will have to wait until late next year to see what regulatory regime will be in place as the federal government delays the implementation of its final regulations.
According to a Bitcoin Magazine report, the final cryptocurrency regulations would not be published in the Canada Gazette until late 2019, which means the regime would finally take effect well into 2020.
Some companies consider the news beneficial as it will give them more time to enjoy a regulation-free environment.
Blockchain Association Canada (BAC) executive director Kyle Kemper told Bitcoin Magazine that he recognized where the government is coming from, given the complexities and risks of the still-evolving sector.
"The decision to delay the proposed regulations bodes well for the Canadian blockchain and cryptocurrency space. The government is committed to an innovation agenda and sometimes … it may be best to observe and intervene as little as possible," he said.
However, others believe that this would put Canadian cryptocurrency firms at a disadvantage in a rapidly-growing global cryptomarket. In the same report, Toronto-based lawyer Evan Thomas said Canadian crypto businesses will struggle to establish connections with financial sector players, therefore limiting their growth.
"Delay can put Canadian businesses at a competitive disadvantage. Other jurisdictions are moving more quickly to establish regulatory frameworks around crypto, to the extent those frameworks don't already exist," he said.
He furthered: "Canadian crypto businesses are implementing compliance programs even when not legally required because financial partners require them or for general risk management. The longer the delay, the more costly it may be to re-work those programs to meet the final regulations.”
A study conducted by Blockchain Research Institute (BRI) pointed out the need for a substantive regulatory work to ensure the establishment of a competitive industry.
The study said Canada is the only federal country which does not have a securities regulatory authority that can suggest the creation of a central regulatory body just like the US Securities and Exchange Commission (SEC).
"Ten provinces, three territories, and the federal government all juggle responsibility for ensuring capital market functions efficiently and honestly — attempting to keep a watchful eye on issuers, investors, investment dealers and other market players," the report said, as quoted by the Bitcoin Magazine.
The study added: “This model was set up to oversee a much simpler world where there were actual traders on stock exchange floors, and where the pace of innovation in capital markets was glacial and regionally confined."