Why Canada is finally thawing to crypto

A version of this story appeared in The Guidance newsletter on September 29. Sign up here.

Hey all, Liam here.

Canada’s previously icy stance on crypto is thawing.

Or, at the very least, industry advocates have identified a key opportunity to raise the temperature.

That’s according to Yves la Rose, the CEO of the Vaulta Foundation and member of one of the country’s largest crypto lobbying groups, the Canadian Blockchain Consortium.

“Since the Genius Act has passed, the conversation has restarted,” Rose said. The Conservative Party is the most active, but some members of the Liberal Party are also engaging, he says.

“They’re seeing the economic opportunity.”

It’d suggest a startling about-face. The country has historically been very strict against crypto companies.

Binance, the industry’s largest crypto exchange, exited the country in 2023, citing regulatory hurdles. Paxos, Bybit, and others have also shuttered their Canadian operations in recent years, citing similar reasons.

Massive scandals, such as the 2019 collapse of crypto exchange Quadriga and Canada’s largest pension fund writing off a $150 million loss from its investment in crypto lender Celsius in 2021, haven’t helped either.

And even as many Canadians bristle at anything related to pro-crypto US President Donald Trump, who once sought to turn the country into the 51st state and whose ties with Pierre Poilievre scuppered the Conservative Party leader’s bid to become prime minister earlier this year, Rose says things are changing.

The shift is driven primarily by one innovation: Stablecoins.

Rose pointed to the government-owned Alberta Treasury Branches’ investment in stablecoin outfit Tetra Digital in September as a key example of shifting tides.

Peter Routledge, the superintendent of financial institutions in Canada, also told local media that he’s encouraging banks to share ideas with his agency about implementing stablecoins.

Rose and his constituents are also hoping for more explicit stablecoin rules as well as traditional banking services for those iced out of the market. Still, it may be a while before any federally mandated rules manifest.

“There’s light,” Rose told DL News. “And we haven’t seen light in a while. So, that’s good.”

ICYMI

• Market structure bill risks creating an ‘illicit finance superhighway’ for DeFi, warns expert Exemptions for DeFi protocols under incoming market structure regulations have some experts concerned.
• Gemini’s Cameron Winklevoss says tokenisation will jailbreak equities — ‘groundbreaking’ The SEC’s new deregulatory blitz has at least one Winklevoss twin waxing poetic. The co-founder of Gemini exchange called Project Crypto “groundbreaking.”
• Legion co-founder pitches SEC on automated disclosures for regulated ICOs Legion, an emerging token fundraising platform, has shared a new tool with the financial watchdog to help clean up the initial coin offering (ICO) niche.

ICYMI

• Market structure bill risks creating an ‘illicit finance superhighway’ for DeFi, warns expertExemptions for DeFi protocols under incoming market structure regulations have some experts concerned.
• Gemini’s Cameron Winklevoss says tokenisation will jailbreak equities — ‘groundbreaking’The SEC’s new deregulatory blitz has at least one Winklevoss twin waxing poetic. The co-founder of Gemini exchange called Project Crypto “groundbreaking.”
• Legion co-founder pitches SEC on automated disclosures for regulated ICOsLegion, an emerging token fundraising platform, has shared a new tool with the financial watchdog to help clean up the initial coin offering (ICO) niche.

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