Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Category Archives: Regtech, Compliance, Governance
Canada Can Learn from UK’s £100M Public Service Reform
UK Innovation | Dec 17, 2024
Image: Freepik/Vectorarte
Canada Should Take a Page From the UK Government's £100 Million Public Service Reform Initiative
There are a myriad of reasons why governments globally are racing to modernize from being inefficient bureaucracies to evolving expectations of citizens, rapid technology advancements, economic competitiveness and need to attract talent etc. Under this backdrop earlier this week, the UK government announced a £100 million initiative led by Pat McFadden, Chancellor of the Duchy of Lancaster to solve the country's most pressing issues with a focus on innovation, agility, and measured results.
The UK’s Plan for Change
It's all part of the UK's broader 'Plan for Change' that aims to transform public services by adopting techniques from the technology sector to achieve five national missions, such as kick starting economic growth and breaking down the barriers to opportunity. The plan is a significant cultural shift in how government operates, and offers Canada lessons to learn from to improve its own public services using a similar approach.
See: Freeland Resigns as Canada at Economic Crossroads
The plan calls for establishing a 'test and learn' culture, which will be an iterative and user-centric approach (think data-driven) to addressing challenges like housing and family support services. Starting in 2025, small teams will be sent to various regions such as Manchester, Sheffield, and Liverpool to experiment with solutions. In tech terms, it's akin to running a pilot project.
Pat McFadden, initiative lead said:
“Test it. Fix the problems. Change the design. Test it again. Tweak it again. And so on, and so on, for as long as you provide the service. Suddenly, the most important question isn’t, ‘How do we get this right the first time?’. It’s ‘How do we make this better by next Friday?’”
A Cultural Shift Toward Innovation
This is a huge cultural change for government, and it's as much about introducing innovative techniques as much as it is a shift away from traditional, bureaucratic models and requires accepting a mindset that encourages experimentation and adaptability. McFadden stated,“If we keep governing as usual, we are not going to achieve what we want to achieve.” Some of the reform effort includes introducing various key techniques to drive change:
See: Rachel Reeves: UK’s Financial Innovation Blueprint
- Agile approach to development where solutions will be achieved iteratively with regular testing and improvements.
- Services will be built based on public needs and feedback.
- Teams will use data/digital tools to track progress and make informed 'data-driven' decisions.
- Teams and work will be outcome-orientated, aiming for clear and measurable results instead of creating long strategy documents.
Fresh Talent Into Government
A major part of this initiative is the need to bring new talent with fresh ideas and cross sector collaboration to avoid silos and redundant work. The UK is recruiting professionals from the tech industry for 6-12 month 'Tours of Duty' to tap into private sector talent and apply the latest skills to public challenges. At the same time, front-line public service leaders are being encouraged to share their practical insights for change. The government is also simplifying its recruitment process to rid of 'mind-boggling bureaucracy,' to attract high-caliber talent more effectively.
“They are the ones on the ground who can see how things are working, where the obstacles are, and where a policy won’t survive contact with reality.”
Lessons for Canada
From housing shortages to lengthy healthcare wait times, Canada suffers from many of the same issues that the UK is dealing with. Canada may find creative, scalable solutions with its own "test and learn" strategy, and could quicken the speed of impactful change by allowing small teams to try new approaches to solve problems.
See: Overcoming Barriers to Growth in Financial Regulation
The Canadian government would be better off to collaborate with digital talent, streamline government procedures, and focus on quantifiable results. All of these changes might improve transparency, and increase public confidence in government.s, this change would increase public confidence in the government.
A Vision for Modern Government
By focusing on innovation, adaptability, and real-world results towards meaningful change both the UK and Canada (if taking a page from the UK's book) could reinvigorate the public sector, making it more dynamic, efficient, and responsive to the needs of its citizens in modern times.
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
 |  |  |
|---|---|---|
 |  |  |
US Financial Surveillance Report Shows Privacy in Crisis
Privacy Report | Dec 13, 2024
How U.S. Surveillance Practices Threaten Financial Privacy and Innovation
Financial privacy is at a crossroads. Another 'eye opening' report dropped December 6, 2024 by the U.S. House Judiciary Committee and the Select Subcommittee on the Weaponization of the Federal Government titled, "How the Federal Government Weaponized the Bank Secrecy Act to Spy on Americans" (47 page PDF) reveals alarming financial surveillance systems being used in the United States. Using laws like the Bank Secrecy Act (BSA), federal agencies use financial institutions to monitor millions of Americans without their knowledge or consent. These findings have serious implications for fintech, innovation, and consumer trust. There's a tug of war between security and privacy and it's reaching a breaking point.
The Scale of Financial Surveillance
Last year in 2023, financial institutions filed 4.6 million Suspicious Activity Reports (SARs) and 20.8 million Currency Transaction Reports (CTRs) with the Financial Crimes Enforcement Network (FinCEN). Over 25,000 government officials at various levels accessed this data without legal warrants to conduct over 3.3 million searches using the FinCEN Query system. FinCEN's integrated access program allowed approx. 27,000 users across nine federal agencies to download entire datasets of financial records with minimal oversight.
Financial institutions often outsource compliance tasks to third party vendors which raises questions about data security and privacy breaches under the confidentiality rules under the Bank Secrecy Act. Another layer of exposure risk.
See: Opinion: The Financial Surveillance System May Be Less a Tool for Crime Prevention than a Means of Bureaucratic Ass Covering
The report describes a system that encourages banks to over-report SARs to avoid penalties for non-compliance (even when the reported activity is unlikely to be connected with a crime or wrongdoing).
Jimmy Kirby, FinCEN Deputy Director:
"There’s the mandatory requirement and then there’s the ability to voluntarily file, as the statutory construct laid out by Congress really is to encourage filing. So... there’s the ones you’re required to file, but there’s also very much an encouragement for people to voluntarily file beyond what they’re required to file."
Weaponization of Financial Data
The use of financial data to target specific individuals or groups is critical issue for policymakers, and has been increasing in recent years. Especially after Jan 6, 2021 uprising in the U.S. where institutions were told to flag individuals on politically charged criteria, such as purchasing firearms, travel to Washington, D.C., staying at specific hotels etc.
See: Surveillance Capitalism: Policymakers must put an end to abusive practices
A similar situation happened here in Canada too during the trucker protests of 2022. Canadian federal agencies used the Emergencies Act to direct banks to freeze accounts of individuals and organizations linked to the protest. They also instructed crypto exchanges to cut off crypto user accounts linked to the protests. Donation- based crowdfunding platforms were also caught in the fire as FINTRAC's knee jerk reaction to impose unwarranted AML/ATF requirements on them without any data-driven analysis.
Daryl Hatton, Founder and CEO of FundRazr:
“In summary, the regulations are ineffective, burdensome, anti-competitive, and damaging to both the domestic donation crowdfunding sector and the Canadian nonprofit/charitable sector. The goal of protecting Canadians from money laundering and terrorism is laudable, but these regulations should be scrapped, and new regulations drafted in full consultation with stakeholders.”
Implications for Fintech and Innovation
Fintech firms operating in the U.S. (especially smaller ones) in some capacity can find themselves swamped by compliance costs which eat up valuable resources away from innovation. For example, a Canadian payment processor may find that routine transactions under Canadian regulations could trigger SARs in the U.S., adding to compliance and operational costs.
See: Privacy and Crypto Shaken as Telegram’s CEO Arrested
Or consider, a crypto platform doing business in the U.S. could encounter conflicting demands such as when U.S. regulators request data but Canadian privacy laws protect that data. These different regulatory environments create frictions.
Why It Matters
Excessive surveillance hurts consumer trust and adversely impacts the adoption of fintech solutions. Use your voice and emerging technology to demand accountability and create private, ethical systems that balance security with individual rights, ensuring a future free from weaponizing financial data inappropriately.
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
| | |
|---|---|---|
| | |
ASIC Consultation on New Digital Asset Rules
Regulation | Dec 12, 2024
Image: Freepik/WangXiNa
The Australian Securities and Investments Commission Seeks Input on New Digital Assets Rules
The Australian Securities and Investments Commission (ASIC) is working to clarify rules for businesses and individuals working with digital assets. They've published Consultation Paper 381 (CP 381) outlining updates to Information Sheet 225 (INFO 225), which provides more specific guidance on how existing financial laws apply to assets like stablecoins, staking services, and tokenized products. Australia's securities regulator is now seeking feedback on these updates.
What Updates Are in Scope?
ASIC’s proposed updates focus on ensuring digital asset businesses understand their obligations under current financial laws. The updates include
See: Canada Pauses CBDC Plans, Australia Advances Wholesale Focus
- ASIC offers 13 practical examples (see below) to show how different digital asset types and services might be classified as financial products.
- Businesses dealing with digital assets classified as financial products must follow the same rules as traditional financial services including obtaining an Australian Financial Services (AFS) Licence.
- ASIC proposes a grace period for businesses actively working towards compliance to protect them from enforcement actions during the licensing process.
- These updates aim to protect customers while supporting market integrity and innovation.
13 Practical Examples
In the consultation document, ASIC provides 13 practical examples to help businesses understand their legal registration and compliance obligations:
1. Stablecoins as Financial Products - Stablecoins tied to an asset (i.e., fiat currency or government bonds) could be seen as financial products depending on their purpose and how they are promoted. For example, if a stablecoin is backed by government bonds and offers financial benefits, it may need licensing as a managed investment scheme.
2. Staking Services - Businesses that let customers stake tokens to earn rewards may fall under financial product rules (esp if they add features like pooling tokens). For example, a staking service combining tokens from multiple users to meet blockchain requirements could require an Australian Financial Services (AFS) licence.
See: Vancouver’s Bitcoin Vision: A New Era for City Finances
3. Tokenized Assets - Tokens representing physical or financial items (i.e., gold or real estate) could be classified as securities if they involve shared profits or pooled funds. For example, a gold-backed token sold on an exchange may need to comply with securities or investment regulations.
4. Wrapped Tokens - Tokens that represent other assets might be financial products if they suggest investment or profit potential. For example, a token offering a stake in a project or company may require registration licensing as a security.
5. Token Sales and Fundraising - Raising funds through token sales, such as Initial Coin Offerings (ICOs), could be regulated as securities if linked to the issuer’s success. For example, selling tokens to finance a blockchain venture may require a prospectus to comply with securities laws.
6. NFTs and Collectibles - Non-fungible tokens (NFTs) are generally not financial products unless marketed with potential financial returns. For example, an NFT that promises a share in future profits from sales may fall under investment rules.
7. DeFi Platforms and Services - Decentralized Finance (DeFi) platforms could require licences if they manage pooled funds or offer lending and borrowing services. For example, a DeFi protocol pooling user funds to generate returns might be classified as a managed investment scheme.
See: Two Artists Sue SEC for NFT legal Showdown
8. Digital Asset Wallet Providers - Wallets offering extra services like earning interest or staking options may need to comply with financial product laws. For example, a wallet letting users pool assets to earn interest would likely require a licence.
9. Payment Services Using Digital Assets - Platforms facilitating payments with digital assets may need licensing as non-cash payment facilities. For example, a business allowing customers to use tokens for everyday purchases might need authorization to operate.
10. Buy-Back Arrangements - When businesses promise to buy back tokens based on value or performance, they may be treated as financial investments. For example, a token issuer guaranteeing buy-backs at a higher price could need an AFS licence.
11. Rewards and Loyalty Programs - Rewards programs using digital tokens may be financial products if the tokens are tradeable and linked to business success. For example, a loyalty token offering value tied to a company’s performance might require regulation.
12. Bundled Services and Products - Digital assets combined with other services may be regulated as a single financial product. For example, a package including tokens with staking and governance features may require licensing for the entire service.
13. Secondary Market Trades - Tokens traded on secondary markets could be regulated if their value depends on the issuer’s performance. For example, a token that increases in value as the issuing company succeeds might fall under securities laws.
See: WonderFi Announces Australian Market Entry
The thirteen scenarios above help businesses assess whether their digital asset offerings comply with existing financial regulations, and clarifies when licensing, disclosure, and compliance obligations apply. Companies are encouraged to assess their service offerings using the practical examples and seek feedback from the ASIC if unsure.
What Does ASIC Want Feedback On?
ASIC is seeking input from digital asset businesses, financial service providers, and other stakeholders on the following:
- Are the examples and explanations in the updated guidelines clear and easy to understand? Do they help businesses navigate the rules for digital assets?
- Is the current process for obtaining licences practical for digital asset businesses? Are there specific issues for products like stablecoins or wrapped tokens?
- ASIC is considering a "no-action" policy that would let businesses applying for licences operate without penalties during the review period. What are your thoughts on this 'temporary relief' idea?
See: PayPal’s Legal Win Helps Shape Future of Digital Wallets
- How can ASIC’s guidelines help businesses transition smoothly to the Government’s proposed regulations for digital asset platforms and payment stablecoins?
- What challenges do businesses face when trying to meet these regulations? Are there practical problems ASIC should address in its guidance?
Your Input Matters
If you’re in the digital asset space or have a stake in how these regulations evolve, now’s the time to speak up. By sharing your feedback, you can help ASIC create rules that support innovation while protecting consumers and keeping markets fair.
The deadline to send your comments to ASICs Digital Asset Team on the proposed updates is February 28, 2025. ASIC plans to release the final guidelines in mid-2025. Email: digital.assets@asic.gov.au
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
| | |
|---|---|---|
| | |
BoC Publishes Final Guideline on Safeguarding End-User Funds
Retail Payments | Dec 12, 2024
Image: Freepik/wayhomestudio
The Bank of Canada Releases Final Guidelines for Safeguarding End-User Funds
The Bank of Canada (BoC) has published its final guideline on safeguarding end-user funds (24 page PDF), providing payment service providers (PSPs) with clear expectations and requirements under the Retail Payment Activities Act (RPAA). The BoC has also shared a summary of feedback from their consultation along with their responses (6 page PDF) that helped update the final guidelines.
See: RPAA Registration Deadline Passed See Who Applied
Key Consultation Insights
1. Trust Arrangements
- PSPs need to set up trust arrangements that meet three clear legal requirements under Canadian law.
- They don’t need separate trust agreements with each end-user, but they must clearly declare the trust arrangement.
- PSPs in Quebec must follow specific Civil Code rules, either by establishing a "trust" or acting as administrators of users' funds.
2. Segregation of Funds
- End-user funds need to be placed in safeguarding accounts as soon as they are received.
- If unavoidable delays happen, the funds must be moved to the safeguarding account by the next business day.
- Any delays must be documented and shared with the Bank and reported as a shortfall.
3. Indirect Arrangements
See: Key Findings from 2025 Advanced Payments and Fintech Survey
- Using intermediaries to safeguard funds can be problematic because they might not have the necessary authorizations to act as trustees.
- If an intermediary goes bankrupt, it can be difficult and complex to return funds to end-users.
- These issues make it hard for intermediaries to meet the Bank of Canada's safeguarding rules.
4. Insurance and Guarantees
- PSPs can safeguard end-user funds using insurance or guarantees.
- The guidelines don't specify how these products should be designed.
- Any insurance or guarantee used must meet RPAA rules, including ensuring users can access their funds if the PSP becomes insolvent.
5. Clarified Definitions and Scenarios
- Clear examples explain the difference between "holding funds" (money kept by a PSP) and "in transit" funds (money being transferred right away).
- The updated rules clarify that certain funds like those set aside for chargebacks do not need to follow safeguarding requirements.
⚠ Important Reminder
Registration Under RPAA is Mandatory
If you’re a PSP operating in Canada under the RPAA, you must apply for registration to continue your services legally.
Not yet applied? Assess if you’re subject to the RPAA.
Operating without registration could result in enforcement actions.
📅 Preparing for 2025
Risk management and reporting obligations come into effect on September 8, 2025. Prepare early to meet the requirements. Start now by comparing your current operations with RPAA requirements. Identify areas that need improvement to meet compliance and map out the steps to address any gaps.
Stay tuned for more updates and insights!
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
| | |
|---|---|---|
| | |
Lessons for Canada from Global Leaders in Regulation
Regulation | Dec 9, 2024
Image: Role of Regulation in Supporting Scaling Up (Regulatory Horizons Council)
Closing Canada's Gap: Smart Regulatory Lessons that Drive Innovation
Regulation isn’t just about control, it can also be a catalyst for innovation and growth. A regulatory innovation mandate and well designed regulatory approach and rules can provide businesses with confidence to innovate while protecting consumers. This article looks at the lessons in a report by the UK's Regulatory Horizons Council called "Closing the Gap: Getting From Principles to Practices for Innovation Friendly Regulation" (96 page PDF, Jun 2022), and a report by the Institute of Regulation, "The Role of Regulation in Supporting Scaling-Up" (47 page PDF, Jan 2024), and highlights Canada's open banking progress and actionable steps to help Canada close its innovation gap.
Eight Principles of an Innovation Friendly Regulatory Culture
The UK has been recognized as a high/gold standard of fintech regulation for many years. In fact, they've held that position for as long as we've been running NCFA Canada's association.
See: Overcoming Barriers to Growth in Financial Regulation
Here are 8 recommendations for effective and innovation friendly regulatory culture.
1. Proportional Regulation
Regulations should protect people and markets without shutting down opportunities. If the rules are too strict, businesses can’t innovate and is stifled. Proportional regulation can give businesses room to grow. Canada’s careful approach prioritizes consumer safety but often leaves companies without the flexibility they need to grow and adapt.
2. Public Engagement
People trust regulations when they feel included in the process and when the benefits and risks are clearly explained. Canada has done well involving industry experts in shaping open banking policies but most Canadians still don’t fully understand what open banking is or why it matters.
3. Support for Commercial Viability
New and emerging technologies like open banking need financial support/incentives, such as tax breaks or grants, and fewer barriers to entering the market. Right now, Canada doesn’t do enough to provide these resources, leaving fintech companies struggling to compete.
See: Balancing Fintech Innovation and Regulation
4. Experimentation via Sandboxes
Sandboxes are controlled spaces where companies can test innovative ideas under relaxed rules to help spark innovation without exposing people or the economy to unnecessary risks. Canada has started using sandboxes which is good news but they could be better tailored for open banking and other industries.
5. Timely Regulation
Speed matters when it comes to innovation. Delays give other countries the opportunity to forge ahead and usually they do. With Canada aiming to fully implement open banking by 2025-2026, it risks falling further behind leaders like the UK and Australia who have already embraced it many years ago.
6. Openness and Collaboration
Teaming up across key sectors and geographical borders can improve efficiencies and help countries stay competitive. Canada has made progress in this area but it could do more to align with international standards and collaborate on a global scale.
7. Staying Flexible and Adaptive (Agile)
In fast evolving sectors like artificial intelligence and financial technology, regulations need to be nimble to keep pace with new developments. Unfortunately, Canada’s regulatory processes often fail to keep up with tech advancements, making it harder for companies to innovate, grow, and compete and scale in cutting-edge industries.
8. Creating Consistency Across Canada
When federal and provincial regulations don’t align, businesses face confusion and extra hurdles. Streamlining these rules across the country would make it easier for companies to understand and comply. Canada’s fragmented regulatory environment is a barrier to progress.
See: Reversing Canada’s Digital Economy Productivity Decline
For example, provinces like Quebec have unique privacy rules (i.e., Bill 64), which may not align with federal privacy legislation like the Personal Information Protection and Electronic Documents Act (PIPEDA). For open banking this could mean there are different standards for data sharing practices across the country.
Scoring Canada’s Open Banking Progress
We asked ChatGPT for some help in ranking Canada's Open Banking Progress across the 8 principles of an innovation friendly regulatory culture to get some perspective on how Canada is measuring up against these principles:
| Category | Score | Comments |
|---|---|---|
| Proportional Regulation | 6/10 | Balanced approach but lacks the clarity and agility needed to drive innovation. |
| Public Engagement | 7/10 | Effective industry engagement but weaker public outreach and education. |
| Support for Commercial Viability | 4/10 | Limited financial support or incentives for fintechs to succeed in open banking. |
| Sandbox Initiatives | 7/10 | Sandboxes are promising but underutilized for open banking-specific applications. |
| Timeliness | 3/10 | Delayed implementation (2025-2026) leaves Canada far behind global leaders. |
| Openness and Collaboration | 7/10 | Solid stakeholder collaboration but needs stronger global alignment. |
| Agility and Innovation | 5/10 | Canada must develop more flexible and forward-thinking regulatory processes. |
| Consistency and Coherence | 5/10 | Misalignment between federal and provincial regulations slows progress. |
| Building Trust | 7/10 | Trust-building efforts need better public education campaigns. |
Total Score: 51/90 (we would label this as slow progress)
While it may seem obvious to open banking stakeholders who have been along for Canada's open banking journey. To date it's been 6 years since the government of Canada announced their intent to implement 'consumer-driven banking' and yet fintechs, investors, innovation stakeholders have seen very slow progress compared to other jurisdictions.
Image: Freepik/rawpixel.com
Do Regulators Have Similar Mandates?
In effort to reveal some of the differences that may exist between the capacity and support that regulators afford for new tech innovations, here's some interesting research conducted on jurisdictional comparisons of competition and growth mandates in Canada, the U.S., UK, and a number of other countries.
So what might be the difference when it comes to supporting innovation between Canadian regulators and the UK?
The Canadian Securities Administrators (CSA) supports financial innovation through the CSA Financial Innovation Hub (FinHub) and its Regulatory Sandbox. While these initiatives show some commitment to innovation, they are not part of a formal mandate to proactively prioritize or drive innovation across regulatory frameworks. Provincial regulators like the Ontario Securities Commission (OSC) recently expanded their mandate to promote competition and capital formation which definitely can help certain sectors and players.
The FCA differentiates itself with its proactive and competition-focused mandate and by its globally supported and recognized innovation programs. While Canadian regulators are making strides in nurturing competition and capital formation, it lacks the centralized structure, agility, and proactive focus on innovation that make the FCA a global leader. Addressing these differences with a unified innovation mandate and improved coordination could seriously elevate Canada’s regulatory effectiveness and competitiveness.
| Area | FCA (UK) | Canadian Regulators |
|---|---|---|
| Competition Focus | Integrated into statutory objectives and operational goals | Promoted by some regulators (OSC, BCSC) but not a universal or central focus |
| Innovation Enablement | Innovation Hub and Regulatory Sandbox are flagship initiatives, widely adopted and effective | Innovation initiatives exist but are smaller in scale and less impactful |
| Regulatory Timeliness | Proactive and agile in adapting to technological advancements | Slower to implement changes and frameworks such as open banking |
| Global Leadership | Active leadership in global regulatory collaborations like GFIN | Participant in global efforts but less prominent in shaping international innovation policy |
Closing the Innovation Gap
Canada doesn’t need to reinvent the wheel. It just needs to act with urgency (it already has purpose)! The insights from the UK’s Regulatory Horizons Council and Australia’s Consumer Data Right framework offer a clear path forward. Canadian regulators should work to reduce the regulatory burden and align regulations across provinces and federal agencies (where applicable), and accelerate the pace of regulatory implementations. Sandboxes need to expand, public education must improve, and incentives for fintechs should be front and center. For more insights, check out: Innovative Approaches to Smarter Regulation
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
| | |
|---|---|---|
| | |
Circle Becomes First Stablecoin to Meet Canadian VRCA Rules
Crypto Compliance | Dec 6, 2024
Image: USDC stablecoin
Circle Internet Group Inc., First Stablecoin Issuer to Meet Strict Canadian Listing Rules
Circle Internet Group Inc, announced by release that they are the first to meet Canada’s strict new rules for value-referenced crypto assets (VRCAs). These regulations are designed to make the stablecoin market safer and more transparent as it continues to grow.
What’s the Deal with VRCA Rules?
Stablecoins are becoming more prominent in Canada and the Canadian Securities Administrators (CSA) decided it was time to tighten the reins. The new VRCA rules required that stablecoin issuers prove that their coins are backed by real assets, operate transparently and meet strict security standards. In September 2024, the CSA extended the deadline to December 31, 2024 for platforms listing VRCA (stablecoins) to comply or they risk getting delisted from Canadian crypto platforms.
Circle's USDC Stablecoin Ticks Regulatory Boxes
Why does this matter? Well, if you’re a Canadian that uses stablecoins on Canadian crypto platforms, it means you’ll still have access to USDC after the deadline. Circle's compliance establishes them as a stablecoin leader in the space, and that they are serious about building trust, transparency and operating in a compliant manner. USDC is one of the most traded stablecoins globally, transacting billions of dollars every month. Stablecoins account for a large chunk of crypto activity in Canada.
See: “Crypto’s Back”, Stripe to Support On-Chain USDC Payments
While other stablecoin issuers like Tether Limited (USDT), Paxos Trust Company (PAX is now USDP) and TrustToken (TrustUSD) haven't yet announced compliance yet, and with the extended deadline of Dec 31, 2024 approaching, Circle's proactive approach sets a high bar for other players.
Closing Outlook
Circle’s USDC compliance with Canada's VRCA rules is a positive for Canada's crypto economy. Anticipate other stablecoin issuers to soon follow or risk being being delisted from Canadian crypto platforms.
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
| | |
|---|---|---|
| | |
Trump Picks SEC Chair, Shakes Up Crypto and Oversight
SEC | Dec 4, 2024
Image: Freepik
Trumps Key Picks: Crypto Advocate for SEC Chair and New Co-Leadership at Crypto Assets Unit
President-elect Donald Trump announced key picks at the SEC that could have huge implications for the crypto industry and financial regulation at large.
Paul Atkins, A Crypto Advocate for SEC Chair
Former SEC Commissioner and known crypto advocate, Paul Atkins, is Trump's pick for SEC Chair. Atkins has been vocal about a balanced regulatory approach, favouring innovation while addressing risks. This is a sharp contrast to the current regulatory climate under Gary Gensler who more or less followed a regulation by enforcement approach towards the crypto industry (he already announced he's leaving Jan 20, 2025). Atkin's leadership signals more industry friendly policies.
New Leadership at the SEC’s Crypto Assets Unit
Also individually announced on their Linkedin profiles, the SEC's Crypto Assets and Cyber Unit will have leadership changes. Laura D’Allaird and Mark Sylvester have been named Co-Chiefs of the division and are tasked with overseeing enforcement actions in the growing crypto / digital assets sector. Both bring extensive legal experience.
Why It Matters
The above leadership changes at the SEC could be a significant turning point for cypro regulation and enforcement in the U.S. and how America will handle financial regulation in the future.
See: Gary Gensler Resigns as SEC Chair, Leaving January 20
If Paul Atkins becomes SEC Chair his approach might make it easier for regulators and the crypto industry to work together resulting in fewer conflicts and more support for innovation. Concurrenty, the new co-leaders of the SEC's Crypto Assets and Cyber Unit are likely to keep a strong focus of enforcing the rules to keep crypto firms in check and remaining compliant.
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
| | |
|---|---|---|
| | |
