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(Kitco News) – Lawmakers in Canada have released a report detailing the findings of their research into blockchain technology and cryptocurrencies, concluding that the industry has “significant long-term potential” and making recommendations for how to regulate the industry.
The Canadian House of Commons Standing Committee on Industry and Technology has released the report entitled “Blockchain Technology: Cryptocurrencies and Beyond” which contains 16 recommendations for the Government of Canada to support the country’s blockchain and cryptocurrency industry and let it grow.
The information in the report was generated from five meetings the committee had with a total of 31 blockchain industry witnesses who reported on the contributions the technology is making to the Canadian economy and its potential to provide greater value in the future.
“While most of the current value is in the variety of actors participating in the cryptocurrency industry, the committee was impressed by testimonials about the current and potential applications of the technology in other industries,” the report said. “Blockchain, along with other technological advancements such as artificial intelligence, has the potential to digitize the parts of our economy that have not yet digitized, unlocking efficiencies and value comparable to previous waves of digitization.”
Based on the testimonies of witnesses and recent events impacting the broader cryptocurrency market, the committee has prepared the following list of recommendations for the government to implement in the future.
The commission recommends that the “Government of Canada:
- Recognize blockchain as an emerging industry in Canada, with significant long-term economic and employment opportunities.
- In its efforts to improve consumer protection and regulatory clarity in the emerging and innovative field of digital assets, should be guided by the principle that individuals’ right to self-preservation should be protected and that easy access to safe and reliable online and offline ramps must be defended and promoted.
- Establish a national blockchain strategy that clarifies the government’s policy direction and regulatory approach and demonstrates support for the industry.
- Call on a group of experts, entrepreneurs, academics, investors and AI experts to support its analysis and understanding and help determine the best steps to take, including creating a platform for exchange and monitoring.
- Pursue opportunities for international collaboration in the development of blockchain regulations and policies, including with our major trading partners.
- Run innovative pilot projects using distributed ledgers to help strengthen the ecosystem and identify emerging companies.
- Create a sandbox where entrepreneurs can test technologies unfettered by as yet undetermined regulations.
- Take a distinct regulatory approach to stablecoins that reflects the difference between these products and other cryptocurrencies, and consider the unique regulatory challenges they pose.
- Adopt regulatory changes to promote the establishment of federally regulated cryptocurrency managers to meet the demand for cold storage services from Canadian cryptocurrency companies.
- Adopt measures for access to banking and insurance services for blockchain companies, including through Crown Corporations.
- In coordination with the provinces and industry, initiate an awareness campaign to educate the public about the risks of cryptocurrencies and the benefits of accessing cryptocurrency markets through regulated Canadian entities.
- Build on the previous SME report and launch a strategic initiative to develop skills and talent and support research.
- Exploring ways to promote adoption of blockchain technology in supply chains.
- Carry out a study on the new possibilities this technology offers for electronic voting, consultation and the modernization of our democratic institutions.
- Investigation of fairness between provinces in the application of the Excise Act to mining activities to ensure fair taxation.
- Insist that digital asset mining is a commercial activity in Canada; and as such take a neutral and equitable position towards this new and growing industry.”
The report’s authors said they put forward these recommendations to help the Canadian government design its national blockchain strategy in a way that solidifies the country’s leadership in the digital asset economy.
According to Bank of Canada data, at the end of 2021, 13% of Canadians said they own crypto assets or crypto funds until the end of 2021 and 38% believe crypto assets play a key role in the financial system.
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