Coinbase, the prominent U.S. cryptocurrency exchange, is currently negotiating with major Canadian banks, advocating for enhanced support towards the burgeoning crypto sector. This outreach comes as Coinbase recently expanded its presence in Canada amidst ongoing regulatory challenges within the United States.
Lucas Matheson, head of Coinbase’s operations in Canada, in an interaction with CoinDesk, revealed that he has been actively communicating with Canada’s premier banking institutions. Although he refrained from naming specific banks, it’s well-known that the “Big Five” in Canada comprise Royal Bank of Canada, Toronto-Dominion Bank, Bank of Nova Scotia, Bank of Montreal, and Canadian Imperial Bank of Commerce.
“We have five banks that have the majority of Canadians banking with them and so one of the things that I’m working on in Canada is working closely with tier one banks to start banking crypto and start supporting our industry,” Matheson said. “I’m hopeful that over the next few quarters, we will see some of our larger banks in Canada start participating in the crypto economy.”
Coinbase officially commenced its operations in Canada after facing legal actions in June by the U.S. Securities and Exchange Commission for functioning as an unregistered securities exchange. The exchange has since extolled Canada’s progressive stance on cryptocurrency regulations.
The Canadian regulatory bodies, according to Matheson, have been proactively assisting in devising a conducive regulatory framework that aligns with the aspirations of the digital currency realm and Canada’s own ambition to emerge as a frontrunner in this sector.
Coinbase has recently been granted its pre-registration undertaking (PRU) in Canada, obligating it to adhere to various regulatory mandates by a specified deadline. Subsequent to this, Coinbase will transition to the nascent Canadian Investment Regulatory Organization, enabling the exchange to secure comprehensive dealer registration. This move will further pave the way for Coinbase to introduce derivative and leveraged products to a broader clientele, encompassing both retail and institutional segments.
Contrasting regulatory approaches worldwide, Matheson observed two primary regulatory paradigms: “regulation by enforcement, like we’re seeing in the U.S., and regulation by engagement, like in Canada,”.
In terms of immediate objectives, Matheson emphasized his commitment to raising awareness among Canadians regarding the merits and significance of a decentralized system and broadening the available payment avenues in Canada.
This July, Canadian regulators unveiled capital proposals for financial institutions dealing with crypto assets, aiming to demystify the classification and treatment of this asset category concerning capital and liquidity.
The intensified scrutiny by the SEC on the U.S. crypto sector has prompted several American crypto entities, including Coinbase and Kraken, to establish operations in Canada. Conversely, entities such as Binance and Paxos have opted to withdraw from the Canadian market, citing the enforcement of more stringent regulations.
