Coinbase threw a party at Shopify’s office in Toronto’s fashion district Tuesday evening, complete with loot bags—attendees who downloaded NFT tickets received US$10 in USDC, a crypto asset known as a stablecoin whose value is pegged to the U.S. dollar. People had the opportunity to spend those digital assets on food, drinks and merchandise as part of a demonstration—but given stablecoins’ hotly contested regulatory status in Canada, it’s an open question what will happen to any USDC left in their crypto wallets. Here’s what you need to know:

The party: Coinbase invited about 200 people—a curated who’s who of Canada’s crypto sector—to the event at Shopify’s glass-walled, plant-filled office. The event featured fireside chats with Coinbase CEO Brian Armstrong, Shopify CEO and Coinbase board member Tobi Lütke and Ontario Securities Commission CEO Grant Vingoe. At a reception afterwards, invitees could supplement their hors d’oeuvres and wine by tapping their cellphones to pay for cocktails, desserts and Coinbase swag with their new USDC.

In an interview with The Logic, Coinbase chief policy officer Faryar Shirzad said the company wanted to demonstrate how stablecoins can be used for everyday payments. “You take crypto and make it more than just a speculative asset,” he said.

The catch: Stablecoin regulation is the most contentious issue in Canada’s crypto sector at the moment. To the industry’s frustration, Canadian securities regulators have taken the position that stablecoins “generally meet the definition of ‘security.’” The clock is ticking on a deadline for crypto-trading platforms and stablecoin issuers to either meet criteria laid out by regulators or stop offering the assets to Canadians.

USDC issuer Circle did not respond when asked whether they intend to comply or stop offering stablecoins in Canada. In an email to The Logic, OSC spokesperson JP Vecsi said “we cannot comment on any individual discussions we’ve had with a particular firm.” Amit Shilton, who works with a PR firm representing Coinbase, said in an emailed statement on Coinbase’s behalf that “we are excited about all the uses of USDC and hope to be able to continue to support it in Canada. We are hopeful for a resolution between Circle and the OSC.”

The rationale: Since Vingoe was a speaker at the event, Shirzad asked him firsthand why Canadian regulators are treating stablecoins as securities rather than payment instruments, which is what the industry is lobbying for. Vingoe said it’s because “they’re entwined with speculative trading by investors and require protection.”

Vingoe said he wants to ensure stablecoins offered to Canadians are backed by adequate reserves. “Unfortunately, many stablecoin issuers don’t want to be transparent about their financial condition,” he said.

The deadlines: Stablecoin issuers like Circle have until Dec. 1 to submit certain documents to regulators, including annual financial statements. Crypto-trading platforms like Coinbase must either comply with regulators’ requirements or stop offering stablecoins by Dec. 29. Even if Coinbase complies, it will have to stop letting Canadians buy or deposit USDC by April 30, 2024 if Circle declines to submit an undertaking. Coinbase may be able to keep offering other stablecoins from issuers that do comply.

If you’ve still got a few bucks left in your Coinbase wallet after last night’s event, here’s a list of merchants that accept USDC. I also hear there are some great deals on NFTs right now.