Reported by RITA TRICHUR

(Excerpt featured below. To read full report, go to: https://www.theglobeandmail.com/business/commentary/article-stablecoin-cryptocurrency-genius-act-donald-trump-money-laundering/)

Hoopla over America’s new stablecoin law is fuelling fears that Canada is missing out on the latest cryptocurrency boom.

The Guiding and Establishing National Innovation for U.S. Stablecoins Act, or the Genius Act, was signed into law by President Donald Trump last week, creating a regulatory framework for stablecoins pegged to the U.S. dollar. (Stablecoins are cryptocurrencies that have values tied to another form of currency or financial asset to maintain steady prices.) 

A related bill, the Digital Asset Market Clarity Act, advanced to the U.S. Senate. The Clarity Act for short, it proposes to divvy up regulatory oversight for virtual assets between the Securities and Exchange Commission and the Commodity Futures Trading Commission. 

At first blush, the U.S. government’s “crypto week” was a resounding success because those two pieces of legislation are helping digital assets go mainstream south of the border. 

But anti-corruption groups, including Transparency International U.S., are warning the Genius Act and the Clarity Act include loopholes for money laundering and sanctions evasion, a forewarning for other countries, including Canada, as they vie for leadership in the US$5.7-billion global digital asset economy. 

“To other countries, I would encourage lawmakers to actually take a risk-based approach and take into consideration that we have a global economy,” said Gary Kalman, executive director of Transparency International U.S., in an interview on Thursday.

As Mr. Kalman points out, crypto is not a typical brick-and-mortar business and it carries a higher risk for illicit finance. That’s because it is relatively easy to set up offshore crypto-issuing companies that sell into other countries without having a physical presence in those jurisdictions, he said.