U.S.-based crypto exchange Coinbase is in talks with Canadian banking giants, trying to convince them to support the crypto ecosystem in that nation, which the company recently entered as it grapples with regulatory uncertainty in its home country.
In an interview with CoinDesk, Lucas Matheson, the director of Coinbase’s Canada operations, said that he’s been having conversations with Canada’s tier one banks. He didn’t identify them by name, but Canada’s largest banks are collectively known as the Big Five: 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 started operating in Canada this month after it was sued in June by the U.S. Securities and Exchange Commission for operating as an unregistered securities exchange. Coinbase has praised Canada’s approach to crypto regulation.
Matheson said Canadian regulators have been engaged and helpful in finding the right regulatory framework for both the digital asset economy and the country’s own ambitions to become a leader in the space.
The exchange recently received its pre-registration undertaking (PRU) in Canada, which commits it to meeting several regulatory requirements by a certain date. After that, it will obtain a restricted dealer registration and move to the newly formed Canadian Investment Regulatory Organization, Matheson said, allowing Coinbase to get its full dealer registration and offer leveraged and derivative products to both retail and institutional investors.
“When we think about regulation internationally, we see two types of regulation: regulation by enforcement, like we’re seeing in the U.S., and regulation by engagement, like in Canada,” he said.
As for Coinbase’s near-term goals, Matheson said that he is focused on educating Canadians about the advantages and importance of a decentralized system and expanding the payment options in the country.
Canadian regulators in July proposed capital plans for banks and insurers who hold crypto assets in an effort to bring more clarity on how to treat the asset class when it comes to capital and liquidity.
Several U.S.-based crypto firms have launched their business in Canada in recent months after the SEC initiated its crackdown on the crypto industry in the U.S., including Coinbase, Kraken. Others, like Binance and Paxos, however, have exited the Canadian market due to its introduction of stricter rules.
