Canada’s clear regulations attract institutions to crypto – WonderFi CEO

Canada's clear regulations attract institutions to crypto - WonderFi CEO

The Shifting Landscape of Canadian Financial Institutions in the Blockchain Industry

Canadian financial institutions are witnessing a notable shift in their interest towards cryptocurrencies and the blockchain industry. The growing interest is attributed to emerging regulatory clarity in the country. Dean Skurka, the CEO of WonderFi, shared his observations during an interview at the Blockchain Futurist Conference in Toronto. He highlighted that his exchange had experienced an increase in trading activity by institutional investors, as opposed to retail investors. This rise in activity is primarily seen in the over-the-counter (OTC) institutional segment. Skurka emphasized that these institutional investors are more sophisticated, immune to market sentiment, and adopt a fundamental approach to their investment strategies.

The Canadian blockchain industry, however, has had its share of challenges with regards to regulatory frameworks. Criticism has been directed towards the Canadian government for imposing stringent regulations that were difficult for crypto exchanges to comply with. Consequently, some major crypto exchanges chose to exit the market entirely. Bybit, for instance, announced it would no longer accept new Canadian accounts due to “recent regulatory development,” while Binance suspended its services for Canadians, citing new stablecoin regulations.

Interestingly, these regulatory hurdles have actually proven to be beneficial to WonderFi. Skurka believes that the clear regulations in Canada have contributed to the exchange’s success. He explained that through the licenses WonderFi holds and the platforms it owns and operates, it has positioned itself as a preferred option for institutional investors. With fewer alternatives available, WonderFi has seen increased activity from institutional clients. Moreover, the exchange has introduced new products tailored to long-term holders, such as staking services, which have further contributed to its growth.

Previously, long-term holders in Canada faced challenges in finding suitable services as lending platforms like Celsius and Voyager had gone bankrupt. Additionally, new regulations introduced as a response to these bankruptcies have increased the operational costs for crypto exchanges. Skurka believes that these developments necessitate the consolidation of the crypto market to adapt to the new costs. In this regard, WonderFi has been actively acquiring smaller Canadian crypto exchanges over the past two years. In 2022, it acquired Bitbuy and Coinberry, and in April 2023, it announced a merger with Coinsquare and CoinSmart. By consolidating these platforms, WonderFi aims to establish itself as a clear market leader that can operate in a compliant environment.

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Skurka remains optimistic about the future trend of institutional interest in the blockchain industry. He believes that as the regulatory infrastructure in Canada becomes more established, institutional participants will continue to view cryptocurrencies as a serious investment opportunity. The direction taken by the Canadian government in terms of regulations and support for the industry has created a positive environment for institutional involvement.

In conclusion, the blockchain industry in Canada has experienced a significant shift in the interest of financial institutions. Increasing regulatory clarity has attracted institutional investors who are looking for a more secure and compliant approach to the crypto market. This trend has been beneficial for WonderFi, with the exchange witnessing growth in its OTC institutional segment and introducing new products targeted at long-term holders. The regulatory challenges faced by the Canadian crypto market have prompted consolidation among exchanges, creating a more robust and compliant environment. With the continued support of the Canadian government, the future holds great potential for institutional participation in the blockchain industry.

This article is based on an interview conducted by Sam Bourgi.

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