Where Coinbase Canada aims, the world will follow.

Last March, US-based cryptocurrency exchange Coinbase expanded north of the border and set up a presence in Canada.
The move is part of the country’s largest cryptocurrency exchange’s efforts to strengthen its international presence and could signal challenges and opportunities abroad.
“This is a natural extension of the spot market and an opportunity for the ecosystem to introduce products and services using efficient and trusted digital assets,” said Lucas Matheson, Canada Country Director at Coinbase. “, he told CoinDesk.
In many ways, what Coinbase is doing in Canada may be ahead of what’s happening in the U.S. and elsewhere.
Regulatory clarity
Canada has a lot to offer in terms of regulatory clarity, especially considering that the U.S. Securities and Exchange Commission (SEC) is seeking to limit the growth of cryptocurrency markets and decouple the cryptocurrency ecosystem from the broader economy. Matheson said this was ahead of the rest of the world.
But while Canada’s regulators are more efficient, they are also arguably more conservative.
“We are very well positioned to see regulators develop a framework that could become a global standard.”
Coinbase is applying for a new type of directive called a “limited dealer registration,” which would require exchanges to register with the Canadian government.
This is especially important given Coinbase’s financial difficulties. Coinbase has significantly diversified its revenue streams in recent years, including the introduction of a prime brokerage segment, a layer 2 blockchain base, and staking and custody services, including several US-based Bitcoin ETF providers. Although successful, a significant portion of its revenue still comes from trading fees.
In other words, Coinbase is a new company that can thrive outside of the unpredictable cryptocurrency price cycle that attracts people when cryptocurrency prices are high and fattens them up when trading volumes fall. If you cannot develop your business, you will forever be a slave to market forces. So developments in Canada may be indicative of what will happen in other countries as well.
“Canada’s regulatory principles allow companies to introduce new products and services,” Matheson said. Coinbase, in particular, is considering launching derivatives such as perpetual futures in Canada, and politicians and regulators such as the Ontario Securities Commission (OSC) are concerned about policy updates to make this happen. I am having a conversation
Is it worth entering the market?
Coinbase recently joined the Canadian Web3 Council. The Canadian Web3 Council is a non-profit group of industry stakeholders working to ease Canada’s recent laws and regulations that have driven cryptocurrency companies out of the country.
For example, in recent months Binance, Bybit, dYdX, OKX, Paxos, and Bittrex (after Bittrex declared bankruptcy) decided to withdraw from Canada in direct response to “recent regulatory developments.”
The Canadian securities regulator’s new “pre-registration plan” will require companies to separate cryptocurrency custody from trading platforms, limit leveraged trading and hire compliance staff, including a chief compliance officer. thank you.
Canada has also regulated stablecoins, imposing strict restrictions on “algorithmic” stablecoins, including MakerDAO’s DAI.
Given the limited market (adult population: approximately 35 million) and unique rules, you may be wondering whether expanding into Canada is worth it.
When Coinbase Canada officially launched last year (the company has been in Canada for some time), Canada was the third most “crypto-aware” country in the world, according to OSC research. However, this does not necessarily lead to transaction fee income.
But for Matheson, the opportunity is not so abstract.
Canada will serve as a sandbox for testing new products that could eventually be launched in the U.S. or Europe and to win over skeptical regulators.
“We offer derivatives to both retail and institutional markets in Canada and are working with industry partners such as the Web3 Council and regulators to explore pathways to leverage our products.”
History of financial innovation
And Matheson believes that’s likely to happen, given Canada’s history of financial innovation.
For example, Canada not only launched the world’s first Bitcoin ETF, Purpose Bitcoin ETF, in February 2021, but also surpassed the United States by launching the first ETF on the Toronto Stock Exchange in 1990. A similar ETF debuted in the United States as well. 3 years later.
Ahead of the approval of Bitcoin ETFs in the United States in January this year, Eric Balchunas, ETF analyst at Bloomberg Intelligence, suggested Bitcoin ETFs as a reference to better understand economic opportunities in the United States. , focused on the Canadian ETF market.
By the end of 2023, Canadian cryptocurrency ETFs will account for nearly 50% of the world’s total cryptocurrency ETF assets under management. However, while the U.S. ETF market is 32 times larger than Canada’s, the total opportunity value of the Canadian cryptocurrency market is just over $1 billion.
Longtime Coinbase competitors Kraken and Gemini have also decided to expand into Canada.
Nonetheless, cryptocurrency adoption is an uphill battle even in Canada. Matheson points out that only at most 13% of the population uses cryptocurrency assets. After all, Canada has a well-developed banking and financial services industry like the United States, and individual customers currently have less need for the services that cryptocurrency assets provide.
This may seem like an opportunity for mass adoption among corporate users, but even that presupposes that individual customers recognize the need to handle cryptocurrency assets first.
“What’s interesting and unique about Canada is that there isn’t a strong political vision for how digital assets can benefit the Canadian economy,” Matheson said.
“So one of the things the industry as a whole is working hard on is how to educate government officials and debunk the myths and misconceptions about the digital economy.”
｜Translation and editing: Akiko Yamaguchi, Takayuki Masuda ｜Image: Sebastian Stam/Unsplash ｜Original text: Where Coinbase Canada Goes, so Does the World

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Where Coinbase Canada is aiming, the post the world will follow | CoinDesk JAPAN appeared first on Our Bitcoin News.