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CIRO’s InnovateSafe test involving inventory positions of stablecoins
Executive Summary
The Canadian Investment Regulatory Organization (CIRO) has approved three applications under InnovateSafe, CIRO’s regulatory sandbox, to test the application of reduced margin rates for firm inventory positions in certain fiat-backed stablecoins.
Nature of the Proposal
The approved participants will test a tiered margin approach for eligible stablecoin inventory positions, combined with enhanced prudential controls, monitoring, reporting, and conservative concentration limits.
Participants
Participation is limited to CIRO-regulated crypto-asset trading platforms (CTP) that meet specified eligibility, systems, and risk-management requirements.
- NDAX Inc.
- Shakepay Inc.
- Wealthsimple Investments Inc.
CIRO may approve, suspend, or remove participants at its discretion.
Purpose of the Test
The InnovateSafe test is intended to assess whether a tiered margin approach, when combined with existing capital and concentration frameworks, appropriately balances capital efficiency and prudential risk management for stablecoin inventory positions.
Scope of the Test
The test applies only to:
- Firm (principal) inventory positions;
- Approved fiat-backed stablecoins meeting defined eligibility criteria; and
- Arm’s-length exposures, subject to a temporary pilot adjustment to concentration thresholds.
Client positions and other activities are excluded.
Duration and Termination
The InnovateSafe test will operate for a period of one year.
Participation may be modified, suspended, or terminated at any time. Absent explicit CIRO confirmation, the test will expire automatically at the end of the evaluation period.
Terms and Conditions
All participants are subject to specific Terms and Conditions, including eligibility requirements, event-driven escalations, reporting obligations, and wind-down provisions.
The full Terms and Conditions are available here: Appendix A – Terms and Conditions for Stablecoin Margin.
Disclaimer
Participation in InnovateSafe does not constitute CIRO endorsement, approval, or authorization of any product, issuer, or business model, and does not represent a formal regulatory position or policy determination.
Contact
Questions regarding InnovateSafe may be directed to [email protected].
Other Notices associated with this Enforcement Proceeding:
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