Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Category Archives: Voices
National Plan to Unlock Growth and Innovation
Royal Commission | March 28, 2025
Image: Freepik
Canada Needs a Bold National Plan to Support Innovation, Economic Growth, and Attract Investment
A group of Canadian policy experts from across the country at Policy Options are calling for a royal commission to secure Canada's future — and they're probably right if the first outputs and key decisions can be delivered on a very quick timeline (i.e. less than 6 months). They warn that Canada’s economic model is outdated, our policies are stuck in the 20th century, and our global competitiveness is slipping (let's not forget our continued productivity decline and inability to track significant investment).
See: The Crisis Canada and Fintech Can’t Afford to Waste
Canada's economy is underperforming. The country is slow to adopt modern financial infrastructure. Interprovincial trade barriers are costing billions. Canada lacks a coordinated innovation and startup scale-up strategy.
They argue that only a national, non-partisan effort like a royal commission can bring Canadians together to build a future-ready plan. For fintech, innovation, and entrepreneurship. If Canada is serious about attracting investment, scaling startups, and competing globally, it needs a national strategy that streamlines regulation, opens interprovincial trade, unlocks innovation and capital, boosts economic growth and attracts investment, and a royal commission could make that happen. Now is the time to act.
Royal commissions have worked before. The Macdonald Commission (1982–85) laid the groundwork for free trade and modern economic policy. A new commission could once again unite governments, entrepreneurs, and civil society to chart Canada's strategy in an uncertain future, but only if it moves quickly.
Why It Matters
Canada has amazing human capital - talent, ideas, and potential, but we need a national strategy that makes it easier for entrepreneurs to launch, raise capital, scale technologies, and compete globally, which would drive significant economic growth.
See: Canada’s AI Competition Report Faces Big Tech Challenges
A royal commission could align innovation, regulation, trade, and investment around a shared economic vision. Done right, it would empower the next generation of Canadian companies and secure long term prosperity, not by protecting incumbents but by empowering performance.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Atkins Pushes for Clear Rules, Less Politics at SEC
Regulation | March 27, 2025
Trump’s SEC Pick Vows to Cut Red Tape and Boost Investment
On March 27 2025, Paul Atkins, President Trump’s pick to lead the U.S. Securities and Exchange Commission (SEC), testified before the Senate Banking Committee as part of his confirmation process. While he hasn’t yet been confirmed, Atkins published prepared remarks for his nominee hearing, explaining how he’d run the agency and what he thinks needs to change. Atkins criticized the current state of U.S. financial regulation, calling it a drag on investment and innovation.
Quote Highlights
Below are some key quotes touching upon hot button themes.
See: SEC Policy Reversals and Crypto Case Dismissals
Atkins makes it clear that he wants to reset the SEC's priorities. His approach would focus on transparency, clear rules and making it easier for companies to raise capital:
“The current regulatory environment for our financial system inhibits investment and too often punishes success. Unclear, overly politicized, complicated, and burdensome regulations are stifling capital formation, while American investors are flooded with disclosures that do the opposite of helping them understand the true risks of an investment.”
He promised to keep politics and fraud out of securities laws and regulations:
“I will strive to protect investors from fraud, to keep politics out of how our securities laws and regulations are applied, and to advance clear rules of the road that encourage investment in our economy to the benefit of all Americans.”
While digital assets were just one part of the hearing, Atkins highlighted the need for a clear regulatory framework for crypto:
See: U.S. Senate Moves to Regulate Stablecoins
“A top priority of my chairmanship will be to work with my fellow Commissioners and Congress to provide a firm regulatory foundation for digital assets through a rational, coherent, and principled approach. Since 2017, as I have led industry efforts to develop best practices for the digital asset industry, I have seen how ambiguous and non-existent regulations for digital assets create uncertainty in the market and inhibit innovation.”
What's Next?
While Atkins has finished his SEC nominee hearing in front of the Senate Banking Committee, he still needs to be officially confirmed. The voting outcome could happen quickly or take longer depending on how much push back he gets, especially around his past work, investments and connections to/with the crypto sector.
For example Senator Elizabeth Warren questioned whether those ties could affect how he regulates the space. Critics worry that he might be too soft on the crypto industry or overlook potential risks to investors. If Atkins is confirmed, it will likely end of the regulate by enforcement era that has plagued the U.S. for years, a positive signal for clearer, upfront rules.
Conclusion
Canadian fintechs, investors, and policymakers should be watching closely, as any changes to SEC policy could have ripple effects across markets, especially for firms operating in both countries and could influence cross-border innovation, investment and policy making.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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SEC’s Crypto Roundtable Reveals Friction, Few Answers
Crypto Roundtable | March 25, 2025
Image: Freepik
SEC's First Crypto Roundtable A Step Forward, But Not Far Enough
On March 21, 2025, the U.S. Securities and Exchange Commission (SEC) held its first public roundtable focused on crypto. Interim SEC Chair, Mark Uyeda, delivered opening remarks, and started by admitting that the law hasn't kept pace with digital asset innovation.
See: SEC Commissioner Peirce Consults on Crypto Regulations
Uyeda pointed out that U.S. courts can’t even agree on how to apply the Howey Test, a legal rule from 1946 that’s often used to decide if something is an investment contract. Some courts say what happens after someone buys a token matters most. Others say what happens before the sale is enough. This kind of confusion makes it hard for the industry to know what rules to follow. While the SEC's hope is that the roundtable was a first step towards more clarity and a better approach towards regulating crypto, some lawmakers felt that the SEC's first crypto roundtable was a missed opportunity.
Old Questions, Few Answers
Bitcoin.com reported that the discussions were fiery. Some panelists said most crypto tokens are clearly securities. Others argued the old rules don’t fit new technologies.
- John Reed Stark, a former SEC enforcement official said he believes people are buying crypto to make money and as a result they are 'investors' not hobbyists collecting things. He also said that he's even received threats for supporting stronger crypto regulations.
- enjamin Schiffrin, a policy expert from Better Markets, added that many broker websites list crypto assets right next to displaying stocks and bonds, and if that’s how it’s being offered to the public then it doesn’t make much sense to treat digital assets differently.
- Teresa Goody Guillen, a lawyer at BakerHostetler, asked whether or not a legal rule from the 1940's (aka Howey Test) was even the right tool for crypto? She said blockchain isn’t just a new product, it’s a whole new way of doing business, and old rules might not fit.
As illustrated by the comments above, not everyone agreed and there's still no consensus on how to classify digital assets.
A Missed Opportunity for Coordination
A former prosecutor and crypto lawyer Renato Mariotti penned an OpEd for CoinDesk, said the roundtable was disappointing. While he agreed it was better than the SEC’s past approach of regulating by enforcement, he felt the discussion focused too much on old arguments instead of evaluating solutions.
See: SEC Confirms Crypto PoW Mining is Not a Security
He was also quick to point out that the Commodity Futures Trading Commission (CFTC), another key regulator for crypto, wasn't involved at all or even mentioned during the session. As such the SEC missed a chance to contribute ideas that will help shape new crypto laws currently being discussed in Congress.
Outlook
Industry just wants clear rules, and in order to develop them, it's important for the SEC and CFTC to cooperate with everyone at the table. Lessons to learn here. The next roundtable will focus on DeFi and stablecoins, where clarity is also badly needed.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Ottawa Unleashes Policy Blitz to Support Economy
Economy | March 24, 2025
Image: Freepik/rawpixel.com
5 Policy Updates Announced by the Canadian Government to Support the Economy
Ottawa has made a flurry of policy announcements in response to growing economic pressure and global trade tensions including a reversal on the planned capital gains tax, a snap federal election, and commitment to aligning with Europe on carbon pricing to support trade, all in just a few days.
See: Trade War Hits! Markets Roil, What Fintechs Need to Know
For Canada's fintech sector, these changes will impact investment, regulation, taxation and international trade and growth. Below are five announcements made since March 20, 2025, and what they mean for fintech:
1. Capital Gains Tax Hike Cancelled
Prime Minister Mark Carney has cancelled the previously proposed increase to the capital gains inclusion rate, which would have raised the taxable portion of gains above $250,000 from 50% to 66.7% (controversial policy). Also, the government will still increase the Lifetime Capital Gains Exemption (LCGE) to $1.25 million from 2025 which means that entrepreneurs can protect (tax-exempt) an additional $233,164 compared to the LCGE in 2024 ($1,016,836).
That's good news for startup founders and investors. It's supportive of innovation because it rewards risk-taking and helps nurture entrepreneurial talent. Investors may be more willing to back early stage ventures if the tax environment remains favourable at exit, encouraging investment in innovative sectors.
2. Snap Federal Election Set for April 28, 2025
Carney has officially called a snap federal election for April 28, saying he needs a new mandate to deal with growing trade tensions with the U.S., a shaky economy, and pressure to stay competitive on climate and carbon policy. The outcome of a federal election can completely change the country's fintech policy agenda from open banking and digital assets to consumer protection and payments modernization. Regulatory clarity will likely be delayed until after the vote.
3. Corporate Tax Deferrals for Tariff Impacted Businesses & Eased Access to Employment Insurance (EI)
Ottawa will tariff impacted businesses delay their corporate tax payments from April 2 to June 30. This support is primarily targeted at companies that export physical goods that are directly affected by new U.S. tariffs. However, fintech companies with U.S. clients or disrupted revenue may also be considered on a case-by-case basis. If your business has been impacted by the trade situation, it’s a good idea to start gathering records now. More details on who qualifies will be released soon by Finance Canada.
See: Carney Shakes Up Leadership and Vows to Protect Canada
In the same release it was also announced that changes are being made to make it easier for workers laid off due to the trade conflict with the U.S. to access employment insurance. Note, fintech platforms offering tools in job search, benefits/support navigation, short term lending, gig economy income smoothing may also see an increased demand due to the potential impact of job losses.
4. Plan to Eliminate Interprovincial Trade Barriers
Prime Minister Carney announced that Canada will table legislation by July 1, 2025 to remove internal trade barriers between provinces to build a stronger and fairer economy. He plans to eliminate all federal barriers to interprovincial trade and labour mobility, and to remove all federal exemptions under the Canada Free Trade Agreement. He met with the premiers to share his plan of building a stronger Canadian economy including items such as mutual recognition of rules, harmonizing licensing, and standardization of goods and services across provinces. Standardized rules across provinces will reduce costs for businesses and consumers, strengthen domestic supply chains, boost productivity (fewer compliance headaches), and unlock new opportunities for Canadian firms.
5. Trade Diversification + Carbon Border Adjustment Commitment
Last week, Prime Minister Carney visited the U.K. and Europe to stress the importance of Canada strengthening trade ties with reliable partners beyond the U.S.. As part of Canada’s plan to diversify trade, the PM saidthat the EU is moving ahead with its carbon border taxes called Carbon Border Adjustment Mechanism (CABM), so Canada would benefit to keep its industrial carbon pricing system to avoid new tariffs on exports to Europe. This sounds reasonable but there's a trade-off. Since the U.S. won't have the same carbon rules, the higher carbon costs in Canada could make our goods less competitive to our biggest export market - the U.S. Per reporting on the Hub, Carney put it bluntly: “Guess what one of the requirements is to diversify trade with the EU? A form of carbon pricing.”
See: The Crisis Canada and Fintech Can’t Afford to Waste
If The impact on fintechs may be twofold. Clean fintechs involved with ESG, carbon credit tracking/management, sustainability analytics etc stand to benefit but legacy exporters, and fintechs serving them, may feel the cost squeeze of stricter environmental standards.
Closing Outlook
These announcements highlight Canada's evolving federal economy strategy. Ottawa is recalibrating its tax approach, trade perspectives, and domestic relief tools in response to Trump's tariff war and global volatility. Fintech leaders should actively track these changes and be ready to adapt as more policies roll out after the election.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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SEC Confirms Crypto PoW Mining is Not a Security
Regulation | March 21, 2025
Image: Freepik
SEC says Proof-of-Work mining doesn’t fall under U.S. securities laws
On March 20 2025, the U.S. Securities and Exchange Commission's (SEC), Corporate Finance Division, issued a statement making it clear that mining crypto on proof-of-work (PoW) networks like Bitcoin isn’t considered a securities transaction. That includes both solo miners (operators) or if someone is part of a mining pool (pooled miners) operating in the U.S. do not need to register with the SEC.
Howey Test Doesn’t Apply Here
This update from the SEC gives the crypto mining community more clarity about where they stand legally in the U.S. as solo or pooled PoW miners. The message is if you’re earning tokens by providing computational effort to secure a PoW network, that doesn't count as investing in a security.
See: Fidelity Report Insights on Digital Assets in 2025
The reasoning is that the infamous Howey Test (used to help determine whether or not an activity is considered a security), is only a security if profits are expected mainly from another party's managerial or entrepreneurial work. In the case of PoW mining, the reward is derived from the miner's own work/effort and hardware, so the activity is not akin to an investment security.
The same statement applies to mining pools where many miners group together and share computing power to improve their chances of solving cryptographic puzzles to earn block rewards. Even when rewards are split and managed by a pool operator, the SEC said the core activity remains technical and administrative, and as such is not an investment contract.
Pushback from Within the SEC, but Industry Welcomes Clarity
Not everyone at the SEC agrees though. Commissioner Caroline Crenshaw issued a dissenting opinion on the same day, saying the analysis was too broad and should be handled on a case by case basis. She warned that some mining setups could involve passive income arrangements that might still fall under securities rules.
See: Marathon Bitcoin Miner Ventures into Whisky Barrels
Still, most reactions online have welcomed the added legal clarity and Bitcoin advocates see this as a win for decentralization. Some have noted that this may influence policy beyond the U.S. and could help shape mining rules in other jurisdictions, such as Canada.
Outlook
While the statement doesn't alter the environmental debates around PoW, it potentially lowers compliance risks and may encourage investment in mining infrastructure. At the end of the day, 'Crypto miners can keep on digging'.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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Elon Musk’s “Magic Money” Discovery and What It Means
Finance | March 20, 2025
Image: Freepik/catalyststuff
Musk Calls U.S. Financial System 'Magic Money Computers'
As reported in various outlets, Elon Musk was recently asked on a podcast with Senator Ted Cruz about what he's learned during his time at Washington to which he dramatically described that the U.S. financial system has 14 computers at the Treasury that can print money out of thin air. But why is the world’s richest person acting surprised, given that anyone paying attention knows that the Federal Reserve has been digitally expanding the U.S. dollar money supply for decades, especially during crises?
It’s possible he’s just explaining it in a way that makes people stop and think. Or maybe he’s pointing out the problem for a reason like highlighting the massive debt-ridden and inflationary risks with the current system of 'printing magic money' and debt addiction. However Musk isn't just an observer here, as he has alternative finance investments in digital assets, fintech, and AI, all of which could stand to benefit if people start questioning traditional finance.
See: Decentralization and Resilience are Key to Bitcoin’s Value
But Musk also uncovered something else, that is banks can also effectively create new money in the form of credit when a bank issues a loan. Now this might sound confusing but when you take out a loan the bank adds money to your account digitally while creating a corresponding deposit at the same time. It doesn't move existing cash around, it digitally generates new money in the banking system. So in this way, commercial banks also have 'magic money computers'. The catch is banks don't have unlimited freedom to do this as they are highly regulated and constrained by capital requirements, regulatory limits, and risk assessments, but banks
Theatrical Delivery But Real Issues
Although Musk's delivery about 'magic money' on the podcast was likely for theatre, the consequences of the current debt and U.S. financial system of printing money to stay afloat has resulted in the U.S. government being over $36 trillion in debt and counting.
As more money enters circulation, the value of the U.S. dollar declines as inflation reduces buying power (and eats away at savings) making everything more expensive. Then as the economy slows because consumers pullback on spending, the government tries to stimulate the economy by lowering interest rates, making access to capital cheaper...but that also makes the overall financial system more fragile, potentially forming a market bubble longer term.
See: The dream of a low-friction financial system is just the beginning
Musk also discovered that the government doesn't track its own spending well. He pointed out that the Treasury’s magic money computers don’t always sync up, and that many payments aren’t clearly labelled for what they fund, and estimates that 80% of this gap is incompetence, 20% is intentional. The idea that trillions of dollars flow through a system that isn’t properly tracked raises serious concerns about government waste and inefficiency - enter DOGE slashing and cutting here.
Crypto is Being Absorbed into Traditional Finance
Bitcoin was meant to challenge the currently broken U.S. financial system with an alternative that government's couldn't manipulate but instead of replacing traditional finance, even though there's been significant innovations in decentralized finance, CBDCs and tokenization of real world assets, crypto is being absorbed into the traditional system, since Wall Street embraced Bitcoin/crypto ETFs. Financial institutional giants like BlackRock and Fidelity are turning Bitcoin into just another institutional asset.
- Central banks are launching digital currencies (CBDCs, Note Trump Banned CBDCs) and governments are integrating blockchain tech while keeping full control.
- Fintech giants dominate stablecoins. PayPal’s PYUSD and Visa’s USDC payments blur the lines between crypto and traditional money.
- Stocks, real estate, and other assets are being tokenized and moving to blockchain but under the control of major financial institutions.
See: A New Era: Financial Stability Board Releases Final Recommendations for Cryptoasset Activities and Markets
Meanwhile, Musk is pointing out broken anomalies of the current system but is he advocating for real change or just positioning himself to benefit in the next round of crypto's integration into traditional finance?
Closing Thought
Think about it. The U.S. government prints money. Now, institutions are doing the same thing with digital assets. Bitcoin was supposed to be independent but that narrative didn't fly with Wall Street, and now early crypto players are being upgraded to play the same game of control. So although the financial game is being digitized and some ways modernized, the winners are largely the same barring the new names being added to the list. So will the future of money ever be decentralized as envisioned? One where fintech and blockchain innovations are shifting control to individuals. Or will it be a digital evolution of the same system, just with a different look and largely the same players.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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UK to Cut Regulatory Red Tape to Boost Tech and Growth
Regulation | March 19, 2025
Image: Freepik/rawpixel.com
UK to Streamline Regulations to Spur Emerging Tech and Economic Growth, Offering Insights for Canada
Big news came out of the UK government on March 17 2025 for those in emerging tech and innovation. As part of the UK's blueprint for innovation, Sweeping changes are being made to its regulatory system, aiming to remove bureaucratic obstacles that have slowed economic growth, fast track innovation, and attract investment. The quarterback of this effort is a new Regulatory Innovation Office (RIO) that will ensure regulators focus on economic growth while keeping up with emerging technologies. The UK wants to flip the script away from excessive risk aversion and position regulation as a tool to drive progress in high impact growth sectors.
See: Lessons for Canada from Global Leaders in Regulation
For NCFA and its community of fintech, web3, alternative finance, and AI driven financial sectors this is an eye popping development since Canada faces many of the same regulatory challenges that have long frustrated the UK such as slow approvals, unclear pathways for innovative new business models, and a fragmented approach to oversight. If the UK's reforms succeed, they could provide a roadmap for Canada to follow.
Current Regulatory Approach is Too Costly, Complex, and Burdensome
The UK government has recognized that start-up firms and scale-ups operating in innovative and emerging tech sectors like fintech, AI and digital assets have struggled with slow approvals, excessive paperwork, and conflicting rules that create too much regulatory complexity and uncertainty, slowing growth and 'stifling progress and innovation'. Further, the regulatory cost has made the country less competitive and the current approach is too 'risk adverse'. A study was conducted showing the regulatory cost is equivalent to approx 2-3% of GDP.
Performance Targets and Pro-Innovation Stance for Regulators
The government has outlined their regulatory vision for addressing the challenges that is agile, proportionate and competitive including:
See: Innovative Approaches to Smarter Regulation
- Support growth – regulation should protect consumers while encouraging investment, competition, and innovation
- Be targeted and proportionate – focus on necessary rules, trusting responsible businesses instead of over-regulating
- Ensure transparency and predictability – provide stability and clear rules so businesses can plan with confidence
- Adapt to innovation – Keep pace with AI, automation, and emerging technologies to maintain a competitive edge
The new RIO sets out 3 specific action plans to achieve these goals of (1) reducing regulatory complexity and burden; (2) reducing regulatory uncertainty, and (3) challenging excessive risk aversion.
One of the most striking changes is the introduction of performance targets for regulators. Of course, regulators have goals today but the new approach means that regulators will now be measured on outcomes that prioritize economic growth alongside consumer protection and reduction of bureaucratic obstacles. The UK's new Chancellor Rachel Reeves has announced that senior execs from the 16 largest regulators including the Financial Conduct Authority (FCA) will have biannual performance reviews to assess their contributions to the plan and vision. This means the FCA and other key regulators will have to operate with greater transparency and agility, ensuring fintech startups don't face unnecessary roadblocks when launching new services.
See: The Crisis Canada and Fintech Can’t Afford to Waste
The UK is also pushing regulators to embrace a risk-balanced approach to decision-making (aka principles-based approach), so instead of an overly risk adverse system where regulators error on the side of caution, there is now a directive to encourage responsible innovation which is particularly relevant to sectors like AI powered credit models, decentralized finance, and blockchain payment systems where regulatory uncertainty has slowed progress. Under the new approach, regulators will need to provide clearer guidance on AI in lending and risk assessment, and in the web3 space, provide faster approvals for tokenized assets to ensure the UK remains competitive in the digital economy.
What This Means for Canada
Generally speaking, Canada struggles with many of the similar regulatory challenges as the UK, if not worse. From where we sit here in Canada, the UK has long been considered a progressive regulator if not a gold standard in regulating new technologies and novel models in financial technology in particular, so a similar approach could benefit Canada at a time when the country must strengthen its economic resilience and competitiveness, amidst President Trump's tariff-trade war and risks to Canada's sovereignty.
Does Canada have a an RIO?
In short, the national Canadian Securities Administrators (CSA) does not have a dedicated 'Regulatory Innovation Office' that is tasked to cut through red tape and bottlenecks while ensuring provincial regulators are accountable for economic growth, but the CSA supports financial innovation through it's Financial Innovation Hub (FinHub) which offers resources such as the CSA Collaboratory, a cohort-based testing environment for regulators and innovators to collaborate, such as this testing initiative on data portability.
See: UK Overhauls Payment Oversight – Should Canada Follow?
Additionally, various provincial regulators like the OSC, ASC, and BSCS have their own innovation related initiatives from sandboxes to innovation offices to foster a supportive environment, but none to our knowledge that issue and oversee performance targets for quick approvals, burden reduction, and contributions to economic growth.
Outlook
The UK's regulatory overhaul is a catalyst for change and ambitious plan in regulatory modernization. If it works, it could set an example for Canada and others on how to support growth without sacrificing oversight.
The key takeaway is simple and clear: Regulation shouldn't be a roadblock to innovation and economic progress. With the right approach, it can help drive it.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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