Coinbase Engages with Canada’s Big Five Banks

Coinbase, the U.S.-based cryptocurrency exchange, is in dialogue with major Canadian banks as it looks to gain a stronger foothold in Canada. This comes amid regulatory challenges the company faces in the U.S. Lucas Matheson, who heads Coinbase’s operations in Canada, told CoinDesk that he’s been actively engaging with top-tier Canadian banks, commonly known as the Big Five—though he didn’t name them explicitly.

Matheson expressed optimism that Canada’s leading banks would start embracing the cryptocurrency ecosystem in the coming quarters. “We have five banks that serve the majority of Canadians, so one of my key objectives is to work closely with these banks to help them get onboard with crypto and support our industry,” Matheson said.

Coinbase recently began its operations in Canada after facing legal troubles in the U.S., specifically a lawsuit from the U.S. Securities and Exchange Commission (SEC). The company has praised Canada’s proactive and engaged approach toward crypto regulation.

Matheson spoke highly of Canadian regulators, stating that they’ve been helpful in crafting a beneficial regulatory framework for the digital asset sector. The exchange recently obtained its pre-registration undertaking (PRU) in Canada, obligating it to meet certain regulatory criteria by a specific deadline. Once that’s complete, Coinbase will become a restricted dealer and join the newly established Canadian Investment Regulatory Organization. This would then enable Coinbase to acquire full dealer status, allowing it to offer leveraged and derivative products to both retail and institutional investors.

Commenting on the regulatory landscape, Matheson said that regulation can come in two forms: “regulation by enforcement,” as seen in the U.S., and “regulation by engagement,” like in Canada.

In terms of immediate goals, Matheson revealed that Coinbase aims to educate Canadians about the benefits of decentralized systems and broaden payment options within the country. This move coincides with Canadian regulators’ recent proposals to clarify capital and liquidity requirements for banks and insurers involved in crypto, made in an effort to bring more regulatory clarity to the asset class.

Notably, Coinbase is one of several U.S.-based crypto companies that have expanded into Canada after increased scrutiny from the SEC. Others include Kraken, although some firms like Binance and Paxos have withdrawn from the Canadian market due to its more stringent regulations.