These days, Canada set the pace as the first government which has ever approved an exclusive Bitcoin mutual fund. That builds upon its reputation as a friendly environment for emerging technologies.
The atmosphere in Canada looks freer and more conducive to innovation in this field, which is based on the numerous developments which the industry experiences even before this time. This is actually a comparison to is a prominent neighbor, the U.S., whose SEC or Securities and Exchange Commission upholds strict measures, while trying to figure out appropriate regulatory systems for the blockchain, as well as the crypto ecosystem.
In one interview, the CEO of First Block Capital Inc. – which is the operator of FBC Bitcoin Trust, as well as the first Bitcoin mutual fund to trade in Canada – named Sean Clark, discussed the underlying factors which make Canada a country which is friendly to new technologies like cryptocurrency. As he said, unrelenting education, political will, as well as open-mindedness, among other factors, make the North American nation an excellent hub for technological innovation.
He said that he thinks in general that the Canadian regulatory bodies understand the potential benefits of the blockchain, as well as a cryptocurrency, and traditionally Canadian regulators were open to technological innovation. This is entirely different from what people get in places like the United States.
The regulators in Canada are more open to conversation
Sean Clark also noted that his company, collaborating with some other experts too, worked directly with the securities regulators and an educational team of Canada for a period six months while also utilizing the discussions as a chance to build relationships. Comparing to this what was obtained in the U.S., particularly with the SEC he thinks that the regulators of Canada seem to be more open to conversation with regards to technological innovations.
Clark identifies the elected leadership of Canada as a critical factor which enables the openness of government to cryptocurrency, as well as some other emerging technologies. He also noted that the Prime Minister of Canada, named Justin Trudeau, embraces blockchain technology. The leadership of Canada also sees the increased isolation of the U.S. of these technologies as a chance to get skilled labor migrated into Canada, to help contribute to the economy.
Clark said that this is what they are seeking to trick down to the regulatory environment, as they are not stone-walling but are instead embracing and wanting to understand the implications of blockchain technology, as well as working with local companies to have the ability to understand and have the asset class flourish.
Another critical factor that Clark mentioned is that the Toronto Stock Exchange or TSX is one of the very few capital markets globally where you can see blockchain and crypto companies publicly listed.
The safety of the investors is paramount
While the Canadian government offers a relatively conductive environment to blockchain technology, as well as digital currency, the CEO noted that they are also ensuring that both institutions, as well as investors, are protected against the risks which are involved. While funds like the First Block Capital are given access into the markets, more critical attention is paid towards them, particularly regarding auditing. So, the government and the regulatory bodies keep a very close eye on these funds, which facilitate a more cooperative relationship between the companies and the regulators.
Working on the product offered by First Block, Clark explained it as a real Bitcoin trust, claiming that there is nothing like it which currently exists in the industry, even on a global level. The single comparable product was the Bitcoin Investment Trust (OTC: GBTC) from Grayscale. But, while GBTC offers its clients fractional ownership of Bitcoin pools, the services of the First Block are utterly different in the sense that the actual fiat values of subscribers are exclusively utilized to buy the equivalent worth of Bitcoin for the period of investment and saved in cold storage to be redeemable in the next period. It is like an ETF for qualified investors.
A view on the future
Looking forward into the future, Clark said that he firmly believes the digital asset market class is going to grow into a multi-trillion dollar asset class over the next 5 to 10 years. But, he also identified the prevailing bear market cycle in the near-term, so he expects that Bitcoin, as well as Altcoin prices, are going to trade sideways or even down for at least the next four months, together with another essential bull run in the following one-and-a-half to two years. This is going to be powered by the entrance of institutions in the space and likely approval of ETFs.
Clark concluded that they should be elaborating on the commitment of the company towards creating financial products, as well as providing legitimacy and transparency to the crypto asset class through some traditional equities. He expects that this is going to improve the confidence of investors, who are going to need no longer to go through unregulated exchanges to participate in the crypto marketplace. As he says, this is going to eliminate numerous risks, and at the same time, it will give institutional investors access into the crypto space just like they have access to equities.