Crypto industry wants Canada to embrace stablecoins, but concerns remain

A key focus in the push is to bring more legitimacy to stablecoins, a type of crypto designed to keep a steady value by pegging it to a currency.

As the U.S. government takes big steps to usher cryptocurrency into mainstream finance, one of the world’s biggest crypto exchanges is urging the Canadian government to match and exceed those efforts, even as concerns mount.

Coinbase Global Inc. is pushing hard to educate Canadian politicians about the moment in the hope of seeing someone in government champion the cause, said Lucas Matheson, who leads the company’s Canadian division.

“We need to drive a sense of urgency in our government to take crypto seriously, and to embrace this technology, to integrate it into our traditional financial system,” he said in an interview.

A key focus in that push is to bring more legitimacy to stablecoins, a type of crypto designed to keep a steady value by pegging it to a currency, often the U.S. dollar, and holding reserves to back it up.

The idea is that by avoiding the volatility that crypto is often known for, stablecoins can work better as a form of internet-based currency. They offer the potential for faster and cheaper money transfers, especially across borders, though come with their own risks.

One of the biggest concerns so far is that without regulation, it’s been hard to know if stablecoin issuers like Tether International and Circle Internet Financial actually hold the collateral they claim.

An industry-supported bill moving quickly through the U.S. government seeks to address those concerns by setting rules about the need to back stablecoins one-for-one to either U.S. dollars or short-term treasuries, and issuing regular financial reports.

“What the U.S. has done is establish some credibility at the most senior levels of government, and we hope that that inspires our elected officials to do the same” said Matheson.