Newly-Qualified Crypto Custodian Balance Aims to Bring ETF Assets Held in the U.S. Back to Canada

Earlier this week, Canadian crypto custody specialist Balance announced it had become a qualified custodian in the country. This milestone has prompted the firm’s CEO, George Bordianu, to advocate for the return of Canada’s ETF assets currently held in sub-custody arrangements in the U.S. with major exchanges like Coinbase and Gemini.

Key Takeaways

• Balance has achieved qualified custodian status in Canada.

• CEO George Bordianu emphasizes the need to repatriate ETF assets from U.S. exchanges.

• The move aims to simplify asset management for Canadian fund managers.

• Bordianu argues for building local infrastructure to support the growing crypto sector.

Balance's New Status

Balance, a long-standing player in the Canadian crypto custody space, has finally attained qualified custodian status. This achievement allows the firm to hold digital assets directly, rather than relying on sub-custody arrangements with U.S. firms. Bordianu stated, "We have billions worth of retail assets in Canada’s crypto ETFs that sit in the United States. We’d like to bring those assets back home."

The Case for Repatriation

Bordianu highlighted that many Canadian ETF providers, such as 3iQ, Purpose Investments, and Evolve, currently have their underlying crypto assets held in the U.S. This situation raises concerns about the security and accessibility of these assets. By bringing them back to Canada, Balance aims to create a more streamlined and cost-effective process for asset managers looking to launch new ETFs and mutual funds.

Building Local Infrastructure

The broader implications of this move extend to the growth of the crypto sector in Canada. Bordianu pointed out that while the current amount of crypto held in Canadian ETFs may not seem significant, the rise of tokenized real-world assets and stablecoins necessitates a robust local infrastructure. He likened the situation to the Toronto Stock Exchange relying on the U.S. Depository Trust & Clearing Corporation for transaction settlements, stating, "If you put it in those terms, it sounds absolutely bonkers."

Conclusion

The recent developments at Balance mark a significant step towards enhancing Canada’s position in the global crypto landscape. By repatriating ETF assets and building local infrastructure, the firm aims to foster a more secure and efficient environment for digital asset management in Canada. As the crypto sector continues to evolve, initiatives like these could play a crucial role in shaping its future.

Sources

• Newly-Qualified Crypto Custodian Balance Aims to Bring ETF Assets Held in the U.S. Back to Canada, CoinDesk.

• El nuevo criptocustodio calificado Balance pretende devolver a Canadá los activos de ETF mantenidos en EE.UU, CoinDesk.

• O recém-qualificado custodiante de Cripto Balance visa trazer ativos de ETF mantidos nos EUA de volta ao Canadá, CoinDesk.

• Новый квалифицированный Криптo баланс нацелен на возвращение активов ETF, хранящихся в США, в Канаду, CoinDesk.

• Il nuovo depositario Cripto qualificato mira a riportare in Canada gli asset ETF detenuti negli Stati Uniti, CoinDesk.