Will Canada's cryptocurrency industry see a revival following the election results?
In the Great White North, crypto has become a contentious issue between the Liberal and Conservative parties. In 2022, the Tories advocated for cryptocurrencies as a way to dodge inflation, pointing their fingers at Liberal economic policies for pushing inflation to 30-year highs and causing a surge in housing prices.
But the Liberals weren't here for that. They criticized crypto for its volatility, arguing that it's too risky to play with in times of instability.
most of the time, crypto is treated like securities, making it tough for canadians to hop onto the crypto gravy train. This safety-first approach is perceived as a major roadblock by Conservatives. They see it as a hindrance to Canada's economic growth and technological advancement.
Former Finance Minister, Chrystia Freeland, slammed Conservative Leader Pierre Poilievre's pro-crypto stance after the cryptomarket's bull run turned bear in 2021. She called out his advice to invest in crypto as a strategic move to skirt inflation as terrible.
Poilievre, however, is all about crypto. He's championed for canadians to be able to use crypto alongside good ol' dollars. He thinks crypto could be the savings grace in times of high inflation, and his ultimate goal is to change the legal classification of crypto from securities to commodities.
He sees crypto as a powerful force that could potentially decentralize the economy. Poilievre has promised to make Canada the "blockchain capital of the world" since 2022, two years before former US President Donald Trump made a similar promise about the US.
Calgary Nose Hill MP Michelle Rempel Garner introduced the Canadian cryptocurrency initiative in 2022 with Bill C-249. The bill aimed to open lines of communication between the Minister of Finance and crypto devs and entrepreneurs to work on a legal framework for crypto regulation.
### Garner's initiative
The bill was warmly welcomed by Canadian crypto innovators and the Conservative Party, but it met its demise in the second reading in the House of Commons.
On the international stage, Trump's remarks about turning Canada into the 51st state of America solidified older voters' support for the Liberal Party. While PM Mark Carney was seen as the best candidate to protect Canada's interests in negotiations with the US, the Conservatives focused on domestic issues like inflation and outrageous housing costs.
In a surprising shift, young voters flooded the Conservative Party, while the older generation, whose top priority was dealing with Donald Trump, formed a powerful voting bloc that handed Carney a victory.
Other factors, like the Green Party's decision to ban candidates and low Conservative support in Quebec, also played a role in Carney's win. In his victory speech on April 29, Carney said, "We are over the shock of the American betrayal, but we should never forget the lessons." Trump, for his part, remained unfazed and said he and Carney were "going to have a great relationship."
In the US, USD-pegged stablecoins have been credited with bolstering the dollar's global strength. However, in 2023, Circle, USDC issuer, removed Treasury bonds from its reserves.
As the Canadians Conservatives have been pushing stablecoins as a means to protect against inflation, the Liberals' stance can be seen as a step towards financial independence from the US. Additionally, their positive view of Central Bank Digital Currencies aligns more closely with the European model. On the other hand, the Trump administration had put a pause on CBDC development over privacy concerns.
## The future of the crypto sector under Carney
Overall, the Liberal Party isn't exactly pro-crypto. They've expressed concerns over the low network capacity of Bitcoin and its dubious role as a store of value. Carney trusts the old-school financial institutions and prefers Central Bank Digital Currencies (CBDCs) because they offer regulatory oversight.
It appears the Liberals aren't planning on softening their stance on crypto anytime soon. As a result, crypto advocates may face quite a battle in Canada over the next four years.
So, what does Carney think about crypto? He's skeptical. He's concerned about the potential fragmentation of monetary liquidity if stablecoins become too popular and thinks CBDCs are the future of digital currencies. He's all about integration, but with stricter regulation to prevent issues like money laundering and market manipulation.
The crypto community is split: some are optimistic, while others fear the regulations will be too strict. Overall, Carney positions himself as a responsible leader who favors careful regulation over unbridled crypto growth.
- The Conservative Party in Canada sees cryptocurrencies, such as bitcoin and XRP, as a potential solution to inflation, advocating for their legal classification as commodities instead of securities.
- In contrast, the Liberal Party has criticized crypto for its volatility, viewing it as too risky for investments, especially during times of instability.
- The Conservatives, led by Pierre Poilievre, view blockchain technology as a force that could decentralize the economy and make Canada the "blockchain capital of the world."
- In the US, the integration of stablecoins has boosted the dollar's global strength, but the Liberal approach to crypto in Canada appears to be a step towards financial independence from the US, with a positive view of Central Bank Digital Currencies (CBDCs) aligning more closely with the European model.
- Despite the crypto community's hopes, Prime Minister Mark Carney, leader of the Liberal Party, is skeptical about cryptocurrencies and favors careful regulation over unbridled growth, expressing concerns about potential issues like money laundering and market manipulation.
- As a result of Carney's skepticism, the crypto sector may face a hard battle for acceptance in Canada over the next four years, with the Liberal Party not planning on softening their stance on crypto anytime soon.
