Trudeau Resigns: Can Canadian Crypto Industry Learn From US Election Playbook?
Canadian Prime Minister Justin Trudeau resigned on Monday after nine years at the helm, as his caucus support dwindled following the exit of the finance minister. The Canadian parliament has been suspended until March 24, and with the political landscape shifting, the succession race is intensifying. The next federal election was originally scheduled for October, but it will now take place sooner.
This departure raises the possibility of a new leadership era in Canada, potentially under someone more favorable to the cryptocurrency sector. Among the frontrunners is Pierre Poilievre, the Conservative Party leadership candidate and a vocal advocate for Bitcoin.
For those unfamiliar, Trudeau’s tenure included several actions that were hostile to Bitcoin, notably invoking the Emergencies Act during the 2022 Freedom Convoy protests to freeze bank accounts and target Bitcoin wallets, sparking criticism for undermining financial freedom. Additionally, his government imposed stringent regulations on cryptocurrency exchanges, including mandatory registration, trading caps, and enforcement actions against platforms like Binance. These actions reinforced the perception of a crackdown on the digital asset space. Poilievre, on the other hand, has expressed strong support for Bitcoin and has called for more open regulations to allow the cryptocurrency sector to thrive.
Like in the US, the Canadian cryptocurrency industry hopes that the upcoming election will shift the political conversation towards digital assets. Companies dealing in digital assets are already putting lessons learned from the US elections into practice.
In the US presidential election in November, pro-crypto politicians secured significant wins, and former cryptocurrency skeptic Donald Trump emerged as a supporter. The price of Bitcoin surged by almost 40%, breaking the $100,000 mark, and Trump appointed pro-crypto officials to his administration. The US crypto sector spent approximately $135 million supporting candidates in the election, which made cryptocurrency a prominent topic during the race.
Coinbase, Ripple Labs, and Andreessen Horowitz were among the crypto sector giants that contributed to the Fairshake PAC and its connected super PACs.
While Canada has not yet seen the same level of political focus on cryptocurrency, there is optimism that this could change with the upcoming elections. However, Canadian laws differ significantly from those in the US. Under Canada’s political system, individual contributions to political parties and candidates cannot exceed C$1,750 per party and C$1,750 per candidate, respectively. Additionally, corporations are prohibited from contributing to election campaigns. Despite these restrictions, the Canadian crypto sector has continued to make strides since November.
One key aspect of the US crypto election campaign was the advocacy group "Stand With Crypto," which garnered support from major crypto platforms like Coinbase, Kraken, and Gemini. In 2023, the group, with 1.9 million followers, extended its efforts to Canada, although they have no plans to endorse any politicians in the upcoming election. Instead, their focus is on building a base of advocates who can engage with one another and their representatives in the Canadian parliament.
Canada may not yet be a political epicenter for cryptocurrencies, but it has had a significant influence on the market. The country was the birthplace of Ethereum, the second-largest cryptocurrency, and home to the world’s first Bitcoin exchange-traded fund (ETF), the Purpose Bitcoin ETF (BTCC).
In 2024, assets in Canadian exchange-traded funds (ETFs) exceeded C$500 billion for the first time, marking a year of record-breaking inflows and new fund introductions. According to the National Bank of Canada, ETF assets under management reached C$519 billion by the end of December 2024, with C$76 billion in new inflows. The sum exceeded the prior yearly record, established in 2021, by 45%.
According to the National Bank, US stock funds received over C$22 billion in new money and completed the year with assets of around C$130 billion.
In comparison, Canadian equities ETFs got C$102 billion, making it a bigger sector for the ETF industry, with Banks, BlackRock and Vanguard leading the pack.
The only asset type with negative flows was cryptoasset ETFs, which saw outflows of C$1.1 billion. US authorities approved Bitcoin ETFs around the start of the year, causing its Canadian rivals' prices to fall significantly.
The other aspect that did not help is the regulations in Canada.
In 2023, the Canadian Securities Administrators developed new rules regarding online marketplaces that trade cryptos. According to the legislation, trading platforms are required to file a pre-registration undertaking and are restricted from listing stablecoins as of December 31.
Many cryptocurrency platforms left the country because of the laws; Binance, Bybit, and OKEx left in 2023, and Gemini intended to leave by the end of last year.
Canadian crypto advocates are fighting for several causes, including the inclusion of cryptocurrency in open banking regulations and the inclusion of Bitcoin in tax-free savings accounts and retirement plans.
Although no major Canadian political party has officially endorsed the sector, digital asset firms have been marketing cryptocurrency as a means to lower prices, a topic that is very important to the country's politicians.
Coinbase Canada CEO Lucas Matheson believes that Canada needs to remain competitive in the digital asset space, especially with the US taking steps to elevate cryptocurrency’s profile. As markets in both the US and Canada saw increased trading volumes and rising prices after the US election, platforms like WonderFi and Coinbase Canada reported a surge in transactions and sign-ups. Matheson sees the growing popularity of crypto in Canada as a positive sign for the future.
This shakeup in Canadian politics, especially with the possibility of a more pro-crypto leader taking charge, could herald a new era for digital assets in the country, potentially aligning Canada with the growing global movement towards cryptocurrency adoption.
Elsewhere
Blockcast
In this episode, host Takatoshi Shibayama speaks to Kain Warwick, founder of Infinex, and a renowned figure in the DeFi space, known for his work on the Synthetix protocol.
Warwick argues that the current crypto landscape, dominated by centralized exchanges, is unsustainable and hinders innovation. He outlines Infinex's vision to create a decentralized platform that rivals the convenience and accessibility of centralized exchanges while offering superior functionality and empowering users with true self-custody.
Previous episodes of Blockcast can be found on Podpage, with guests like Peter Hui (Moongate), Luca Prosperi (M^0), Charles Hoskinson (Cardano), Aneirin Flynn (Failsafe), and Yat Siu (Animoca Brands) on our most recent shows.
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