Canada is the birthplace of the decentralized blockchain platform Ethereum and the world’s first bitcoin ETF.Andrew Vaughan/The Canadian Press
Lucas Matheson is chief executive of Coinbase Canada
In a world that’s becoming more unstable every day, embracing digital assets must be part of Canada’s plans for the future.
We are seeing countries around the world take cryptocurrency seriously. The United States has appointed a “crypto czar,” formed a working group on digital assets, and is launching a strategic cryptocurrency reserve. Last year, the European Union’s regulations for crypto assets (MiCA) are coming into full effect.
But here in Canada, we lag – even though this country has historically been a global crypto leader and innovator. We’re the birthplace of the decentralized blockchain platform Ethereum and the world’s first bitcoin ETF.
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Crypto was not a priority for our previous administration. And although Pierre Poilievre came out strongly in support of crypto when he ran for Conservative leader, no policies around digital assets appeared in his party’s official platform before last month’s election. Such plans were absent from the Liberals’ platform, too.
Now, with Prime Minister Mark Carney having formed government, there’s a critical opportunity to catch up – and lead – by prioritizing policies around digital assets. Mr. Carney has made various positive public statements on crypto in the past, which is a step in the right direction. He has also appointed a crypto champion to cabinet: Joël Lightbound, the Minister of Government Transformation, Public Works and Procurement, endorsed bitcoin in the House of Commons in November, 2023, contrary to the then-government’s stance.
Crypto users aren’t a fringe group – an estimated five million Canadians already hold digital assets. And there’s a clear economic opportunity. The House of Commons’ Standing Committee on Industry and Technology found that the global blockchain industry could grow to US$1.59-trillion by 2030.
The price of bitcoin remains volatile relative to more conventional assets, but over 16 years it has matured considerably. BlackRock, the asset manager, has recommended investors allocate up to 2 per cent of their portfolio to bitcoin. Countries including the United States are in the process of establishing a crypto reserve and even here at home, last year the City of Vancouver voted to explore the process.
The blockchain ecosystem is still young and, like all new technologies, has its growing pains. Bad actors are also continuing to affect the industry’s reputation. From investment and phone scams to kidnappings to exchange-platform hacks and the exploitation of meme coins, we still see Canadians who are learning about crypto being taken advantage of, further damaging trust in the system.
Despite this turbulence, I deeply believe that cryptocurrency is the future of money and that, with some bold commitments, Canada can become a global leader in it once again.
First of all, within the first 100 days, the new government should establish a crypto task force, bringing together leaders from public and private sectors and academia with the goal of developing a national strategy on implementing policy. The task force would also map out a strategy to establish a strategic crypto reserve, which would help diversify government holdings and hedge against financial risks.
The government should also begin regulating stablecoins, cryprocurrencies whose value is pegged to a reference asset, and put forward a market structure bill, similar to the laws currently progressing through the U.S. Congress. The government needs to remove securities regulation barriers for fiat-backed stablecoins, which are crypto’s fastest growing use case, and align with international jurisdictions by treating them as payment instruments rather than securities.
Next, our banking and payment infrastructure must evolve. Our banks need to be allowed to safely hold and manage crypto assets, enabling unified management of both traditional and digital assets. This could be a win-win for consumers and financial institutions. For consumers, these reforms would greatly simplify their experience managing digital assets and build deeper trust in crypto. For banks, this could open up new revenue streams and demonstrate their commitment to financial innovation.
We also need to double down on crypto mining. With some of the world’s cheapest energy, Canada could become the world’s crypto mining capital. We’re talking about unlocking many billions of dollars in potential investment. The new government needs to make it easier for Canadians to build large crypto and AI data centres, and that starts with cutting red tape and taxes that make it difficult to establish mining operations.
Lastly, Canadians need clear guidelines, clear definitions of crypto assets and greater education on investing in digital assets. There’s so much opportunity in blockchain, and government and the private sector need to work together to create safe ways for Canadians to participate in the crypto economy.
Canada has the talent and resources to become a global crypto leader again. It’s up to the government to make it happen.